The Prime Minister has called on banks to pass on interest rate cuts to homeowners with mortgages in a bid to ease the pinch of the credit crunch.

Gordon Brown made the comments in a Sunday newspaper after the Bank of England cut the interest rate by 0.25%, taking the rate to 5% last week.

It is the third interest rate cut since December but some banks seem to be resisting passing on the full reductions and Mr Brown said he is worried that this is having a damaging effect on the already fragile housing market.

In an effort to resolve the situation, Chancellor Alistair Darling is said to be meeting with lenders to discuss new measures to ensure those lower interest rates are passed on to mortgage holders.

As part of his piece in the News of the World, Brown also said that banks should be honest about bad debts because the lending squeeze was making it harder for them to raise funds on financial markets.

He said that if the world's largest banks could come together quickly and agree as a group to come clean about the potential bad debts they face it could restore confidence to the markets.

Nicola Reeves, Conveyancing Executive at Rowlands, commented "From a personal point of view, as a home owner, a cut in the base rate was appreciated and would have been more so had lenders passed the cut to their borrowers. From a more professional and business point of view this would assist the property market by making mortgages more affordable to our existing and future clients."