There is hope that a new mortgage working group will help to ease the troubles in the UK mortgage market.

Alistair Darling, chancellor of the exchequer, has launched the group in response to the current market conditions.

He announced that the expertise of lenders and investors will be taken onboard, along with those from organisations such as the Bank of England and the Financial Services Authority.

Launching the mortgage working group, Mr Darling said that he hoped it would help to stabilise the markets.

"The recent and ongoing disruption in global financial markets has raised complex issues about the functioning of the mortgage-backed securities markets," he commented.

"I am delighted to announce that Sir James [Crosby] will chair the industry working group that will consider market-led initiatives to improve these markets.

"This work will be an important contribution to stabilising the cost and supply of UK mortgages," added the chancellor.