Chancellor Alistair Darling is expected to announce a £1bn package to support the housing market in tomorrow's Budget.

Mr Darling will also extend the stamp duty holiday until the end of the year on properties under £175,000.

The government is also expected to provide money for construction sites where work has stopped due to the recession.

Also, a scheme to help recession-hit families avoid losing their homes is to be introduced which will see eligible homeowners reduce monthly mortgage payments for up to two years.

The Homeowners Mortgage Support scheme (HMS) will help households who have lost their job or forced to take lower paid work.

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Households will only qualify for the scheme if they have made regular payments for the last five months and owe less than £400,000 on the mortgage.

Homeowners must be able to pay at least 30% of the interest each month.

Richard Diment, Director-General of the Federation of Master Builders (FMB) said: "We will have five million people waiting for social housing by 2010, and the Government must act now to meet the challenge with a range of measures designed to bring the 943,000 empty home across the UK back into use, and a massive programme of social house building to meet demand. The beauty is that in doing so, the Government will be creating jobs, maintaining skills and production capacity in the construction industry, and creating the opportunity to address environmental performance standards. It will also be creating sustainable revenue streams from rental income for local authorities and housing associations; and unlike the bank bailout, taxpayers will actually get something for their money: homes for the people who live here."

(CD)