Alf Young on Thursday: As rival politicians, some industry insiders and most commentators were giving the UK government�s housing stimulus package a decided thumbs-down on Tuesday, I picked up a copy of the Greenock Telegraph.

As rival politicians, some industry insiders and most commentators were giving the UK government's housing stimulus package a decided thumbs-down on Tuesday, I picked up a copy of the Greenock Telegraph. In its weekly property section I found two leading housebuilders already doing their own thing to boost sales.

One was offering a rent first, buy later deal on newly-built local apartments. Tenants could rent for up to 18 months. If they then chose to buy, they would get half the rent they'd paid returned, to go towards a deposit on a mortgage.

The other was offering to pay the mortgage, utility bills, council tax, buildings and contents insurance, food shopping of £480 a month and petrol or diesel of £150 a month for a whole year to anyone agreeing to buy selected mews and semi-detached houses on the Inverclyde waterfront.

Most of these homes have price tags falling below the government's new £175,000 threshold for stamp duty land tax for the next year. So there's a saving of up to £1750 to be had there too.

These industry initiatives are a useful reminder that markets, as well as politicians, have to respond to demand shocks whenever they come along. We've all heard the reports of builders mothballing sites and paying off workers as sales plummet. Demonstrably, that is not all they are doing to address their current challenges.

However, the one bit of the market that is slowest to respond to these turbulent times is the bit that caused this whole problem in the first place. Banks and other providers of mortgage finance have shown some signs of more competitive product pricing in recent weeks. But in their shell-shocked state, they have a long way to go to recreate the levels of market liquidity vital for any sustained housing rebound.

Fear still prevails. Fear of the mortgage-backed investment junk still lurking in each others' balance sheets. Fear of how far the bursting of an unsustainable housing bubble still has to go. And fear, given no-one knows when the house price bottom might be reached, of reviving the high-risk lending that fuelled this unsustainable boom in the first place.

The Organisation for Economic Co-operation and Development, having factored the UK's housing woes into its latest forecasts, now predicts our economy could experience a technical recession in the second half of 2008. Those already calling for government intervention to restore the market liquidity missing from Tuesday's housing package will, doubtless, holler all the louder for action.

With his well-tuned eye for the main chance, Scotland's first minister was quick yesterday to claim that, had he the powers, he would be reflating the Scottish economy right now. Alistair Darling will do nothing I suspect, until he hears definitively later this month from Sir James Crosby on what can be done to improve the functioning of markets in UK mortgage-backed securities.

Crosby, remember, cautioned back in July, in his interim report, that he "may yet recommend that the government should not intervene in the market, on the grounds that such intervention would create more problems than it would solve". So there is no guarantee of any more action to come.

We may be left with that temporary easing of the stamp duty threshold, assorted schemes north and south of the border to help first-time buyers and those experiencing difficulty servicing their existing mortgage bills, and housebuilders and developers becoming much more creative with their own sales pitches.

In this housing market, the bottom will be reached when enough funders, investors and house- buyers decide that fear has been overdone and opportunity beckons anew. One leading player told me the other day that, while times are dire right now, he can see another housing boom emerging within five years. The current slowdown in new starts, he argues, will simply exacerbate the underlying imbalance between supply and demand. The longer it goes on, the bigger the next boom will be when it arrives.

That kind of analysis offers some kind of antidote to those Tory and LibDem politicians warning of the folly of pushing buyers back into a market where prices are still falling. Some of their warnings would carry a bit more weight if they weren't busily promoting their own interventionist schemes to relieve other areas of stress in our economic lives right now.

David Cameron and George Osborne, in particular, might care to look again at their own proposal for a fair fuel stabiliser, published in July. It appeared when crude oil was above $130 a barrel and rising. Under their stabiliser, "when fuel prices go up, fuel duty would fall". They could save us all 5p a litre. But the reverse also holds. As they themselves put it: "When fuel prices go down, fuel duty would rise."

Well, since July that's exactly where we are. From a record high of $147 a barrel, crude oil is heading back towards $100. Presum-ably, that 5p the Tories would have knocked off the pump price on the way up would now be being restored - and more - as the price now falls. Back to the drawing board on that one, I fear.