The National Association of Estate Agents (NAEA) has demanded Gordon Brown offers temporary tax relief to prevent a crash in the housing market.

The NAEA suggested that a decision by the Bank of England to cut interest rates would not be enough to prevent a recession as leading lenders are failing to pass on the benefits to customers.

Peter Bolton King, chief executive of the NAEA, said: "The NAEA is calling on the chancellor and prime minister to consider other options to give people a break such as a stamp duty holiday for first time buyers and temporary tax relief on the mortgage interest of people''s primary residence.

"This would at least ease the difficulty that people in this country are facing and give them the confidence boost that is needed to the market to get back on a more positive footing."

House prices slumped by 2.5 per cent in May and the Council of Mortgage Lenders (CML) predicted the number of property sales in the UK could drop by 35 per cent on last year''s figures.

On top of that, the CML suggested house prices could fall by a further seven per cent by the end of the year.