LONDON (AP) — The British government unveiled a package of tax cuts and increased spending targeted at first-time home buyers yesterday in a bid to reverse the country's worst housing slump in almost two decades.

However, industry leaders and analysts say the financial incentives are unlikely to spur buyers back into the market, suggesting that the package is more about reviving Prime Minister Gordon Brown's flagging popularity.

As the OECD issued its most dire warning on the British economy yet, predicting it will fall into recession in the second half of the year, the government announced that it was temporarily scrapping the tax that borrowers are required to pay on house purchases at the lower end of the market.

Brown also revealed plans to spend £1 billion ($1.8 billion) to help buyers hit by tighter mortgage lending criteria in the face of the global credit crunch, giving low-income purchasers a fee-free five-year loan worth up to 30 percent of a home's value.

Communities Secretary Hazel Blears said the measures would not "transform the world," but would "make a big difference to those people that are struggling".

"We can't run people's lives but we can try and help," Blears said. "What we're saying is ... we will help you get the deposit so you can get the mortgage and you can get into the housing market."

However, economists, mortgage lenders and builders said that the government's financial package is dwarfed by the massive scale of the housing crisis, as house prices continue to slide and home repossessions rise to their highest levels since Britain was last in recession in the early 1990s.

"While these measures are obviously very welcome for the people who benefit from them, we suspect that they will only have a very limited overall impact in supporting the housing market as the underlying fundamentals remain poor," said Global Insight economist Howard Archer.

The Treasury said that its decision to freeze so-called stamp duty on properties up to £175,000 ($312,500) for a year from today would cost around £600 million (around $1.08 billion) in total, suggesting that it expects about half a million home-buyers to benefit from the change. The freeze means that anyone buying an average-priced home — the latest figures from the Nationwide Building Society show the average house price at £164,654 — won't pay the duty. However, industry analysts pointed out that the plan narrows the gap between the stamp duty tiers, which kick into a three-percent charge at the £250,000 ($446,000) mark, which they argue will make buyers reluctant to purchase properties above that level.

Others said the measures do not go far enough to resolve the issue of mortgage funding.

"Today's proposals do not address the core problem, which is the collapse in mortgage availability," said Roger Humber, spokesman for the National Federation of Builders, adding that the package was "little more than a political sticking-plaster".

Brown, the former Treasury chief who has presided over an unprecedented period of economic growth since the ruling Labour Party came to power in 1997, is being increasingly criticised for his handling of the current crisis.