Housebuilders' shares leapt today after the Government unveiled measures to help home buyers through the current housing market crisis, including a year-long holiday on stamp duty for properties costing less than £175,000.

Shares in Taylor Wimpey, the UK's biggest housebuilder by volume, climbed 8.9 per cent to 61p, while Persimmon's stock rose 11 per cent to 428.5p.

Bovis Homes, Bellway and Barratt Developments also saw their shares jump by 6.4 per cent, 6.9 per cent and 5.7 per cent respectively.

Building materials distributor, Wolseley, which has been hard hit by the housing downturns in the US and the UK, also advanced almost 6 per cent.

The leading homebuilders' shares have slumped by between 60 and 90 per cent this year, as the companies have had to halt building on new sites, lay off thousands of construction workers, stop buying land and negotiate new covenants with their lenders in the face of an unprecedented collapse in sales of new homes.

The Government's £1 billion package of help for the housing market includes five-year interest-free loans to some first-time buyers. Households earning less than £60,000 will be offered loans free of charge for five years on new properties, co-funded by the state and developers.

Hazel Blears, Communities Secretary, also announced proposals today aimed at putting life back into the struggling property market. The loans system, called HomeBuy Direct, is to be run together with "large-scale" property groups.

Once the five-year "free" period is up, homebuyers will be asked to pay a fee, the Department for Communities and Local Government (DCLG) said.

The DCLG said in a statement: "Not only will this [HomeBuy Direct] help first-time buyers, but it will also support the industry by identifying buyers for their new homes. This will help the housebuilding industry weather difficult conditions, so that when the market recovers, they are ready to expand and get back on with building the new homes the country needs for the long term."

For existing homeowners who can no longer afford mortgage payments, the Government says councils or social housing landlords can pay off the debt and instead charge tenants rent "at a level they can afford".

Kevin Cammack, an analyst at Kaupthing Singer & Friedlander, said: “This could help the housebuilders shift through their stock.The market is thinking that if they can turn work in progress into cash more quickly, it will help keep them within their banking covenants.”

House prices have fallen steadily since last October. Last week, Nationwide, the UK's largest building society, said the decline in house prices was reaching double digits and falling at a rate not seen since the fourth quarter of 1990.

In its latest monthly assessment of the market, the society said the price of a typical house had fallen by 10.5 per cent over the last 12 months to £164,654.

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