Industry representatives press prime minister to ensure lending from banks resumes

Housebuilders this morning pressed the prime minister to take immediate action to free up the mortgage market in a face-to-face meeting with Gordon Brown in Downing Street.

The meeting, thought to be attended by a number of major housebuilders and contractors, was called to suggest ways to avoid further collapse in the construction sector.

The builders are thought to have told Brown that the immediate priority was to ensure lending from banks resumed, particularly for mortgages. Stephen Stone, chief executive of Crest Nicholson, said he urged Brown and housing minister Margaret Beckett to take advantage of their ownership stake in a number of the major high-street lenders.

He said: "If the government part-owns the banks then they can just tell them what they want them to do. We said this is not something you can do in six months – it is something that needs to happen now." He added it was "scandalous" that Northern Rock, which is 100% owned by the government, put up its mortgage rate by 0.3% earlier this week, despite the continuing collapse in house sales.

It is also thought builders urged Brown to implement the findings of Sir James Crosby, published alongside the pre-Budget report on Tuesday, to give government guarantees worth £100bn to mortgage lending. Chancellor Alistair Darling said he would report back on the feasibility of such a scheme, designed to get banks lending again, by the time of the spring budget.

It is thought Stewart Baseley, executive chair of the Home Builders Federation, was also in attendance.