A year from the start of the credit crunch, the £1bn housing package announced this month provides welcome support for struggling families. Housing is a huge issue on the doorstep, whether it’s young people who worry they will never get on the housing ladder, families waiting for a council house, or people approaching retirement hoping their house will provide them a pension.

The package – focusing on help for those at risk of repossession, first-time buyers and increased social and affordable homes – will help the ailing housing market and those most impacted by it. Support cannot come too soon. Repossessions, running at double the rate they were a year ago, are devastating for the families affected, damage fragile communities and exacerbate falling house prices. The new mortgage rescue scheme will allow local authorities and housing associations to buy some or all of a property and lease it back, helping 6,000 families stay in their homes. And by helping families avoid mortgage arrears in the first place, with greater, more timely support with mortgage interest payments, fewer people should have to dip in to the mortgage rescue scheme in the first place.

A second theme in the package was support for first-time buyers. In the last 12 months banks have swung from lending excessively to being overly cautious; first-time buyers with good prospects are unable to get mortgages. The disappearance of such buyers is contributing to the decline in house prices – bad for families wanting to own their own home and bad for the economy. The extension of shared ownership schemes is an excellent way of supporting first-time buyers: sharing the risk of volatile housing prices and requiring smaller deposits, a crucial barrier to home-ownership. Help with stamp duty will also make some difference.

And more can be done if it is needed. The Council of Mortgage Lenders is working on a guide for dealing with customers in financial difficulties. New rules should ensure courts allow repossessions only when the lender has looked at all options, a framework that the Financial Services Authority should enforce.

However, getting a mortgage is the sticking point. The government has provided a life-line to banks with the Bank of England special liquidity scheme providing around £100bn in bonds in exchange for mortgage securities. The scheme expires on 20 October and the banks are keen that it should be extended. While it should be continued – to support a market so damaged by the sub-prime crisis in the US – conditions should be set so banks use the money to benefit homeowners and potential first-time buyers. These would include passing on interest rate reductions, capping arrangement fees, and signing up to a code of conduct for dealing with customers in mortgage arrears. Government needs to play its part in supporting the housing market, but so too do the banks.

Weakness in the housing market reminds us that homeownership is not always the best option, especially for those on low incomes and insecure employment. A strong socially rented sector is important too. The government recognises this and the decision to bring forward money will result in an additional 5,500 socially rented homes in the next 18 months. There is certainly capacity in the construction sector to build new homes but, given the weak financial position of many firms, purely private sector schemes are unlikely to be viable. So announcements that councils will be able to apply for funding to build new social housing is welcome. Going further with additional money for the innovative scheme to purchase unsold housing stock for social or affordable housing could address the chronic housing shortage in many of our communities.

The Tories say nothing of substance on these issues. David Cameron’s only contribution is a pledge to raise the stamp duty threshold to £250,000, but this would do little on its own to revive the market and nothing to help those families who cannot get a mortgage. If the Tories want to be seen as the next government they must set out their prescription for economic revival. Progressives believe in the role of markets to encourage investment and create incentives, but also recognise the role of the state in providing mutual insurance to protect families from market failure. By contrast, the Tories remain wedded to a philosophy which stresses cutting taxes and leaving families to fend for themselves. Labour’s joined-up and ambitious housing strategy provides a new sense of purpose for our third term and demonstrates that we, not the Tories, have the ideas to meet our future challenges.