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MP’s have stated that the  government scheme to kick-start the UK mortgage market is not working.

The £50bn asset-backed guarantee scheme was  “doomed to fail”, according to the Communities and Local Government Committee.

Greater steps must be taken to bolster mortgage lending if the housing market is to recover they added.

The committee’s report also called for skills and capacity in the UK construction sector to be protected.

It took ten years to rebuild capacity in the construction industry after the last recession, the committee warned.

The two separate reports - by PricewaterhouseCoopers and the Royal Institution of Chartered Surveyors (RICS) - said that UK property prices would struggle to make meaningful recoveries until mortgages were more readily available.

Latest figures show that mortgage lending picked up in May. But the number of home loans was still 28% lower than a year ago, according to the Council of Mortgage Lenders (CML).

The asset-backed scheme, announced in this year’s Budget, provides guarantees on lenders’ mortgage-backed securities - a step that enables them to sell on mortgages to investors, raising new money to lend to consumers.

But restrictions on which institutions can take part, and the types of loans that it covers, meant that it had so far had limited success, the MPs said.

“In its current form the ABS is a leap that reaches across only half the chasm: impressive, but doomed to fail,” said chair of the committee, Dr Phyllis Starkey.

“If we are to meet house-building targets, then CLG ministers and senior officials must maintain pressure on the Treasury to bring forward new measures to get the mortgage markets moving.”

The report added that government policy gave too much attention to promoting home-ownership, with not enough attention given to the rental sector.

“We now need a vigorous debate to review this approach and formulate a more coherent vision to guide effective housing policy and investment into the future,” Dr Starkey said.