An urgent meeting with the Minister for Finance, Mr McCreevy, is being sought by the Irish Home Builders Association (IHBA) after its committee met yesterday in an emergency session to formulate a response to the Bacon Report on house prices.

At the close of the meeting, Mr Michael Goggins, director of the association, said the Government would be lobbied to reverse the abolition of mortgage interest reliefs.

As a compromise measure, the IHBA wants the reliefs to be "ring-fenced", so that mortgage interest payments can continue to be claimed for tax relief against rental income on the property in question, a measure which would protect small investors.

A number of auctioneers also turned up at the meeting to co-ordinate a response.

One said that the Irish Auctioneers and Valuers Association had already made representations to the Minister but the view was that "he would not be put into a corner".

Later, a spokeswoman for the IBHA said that constraining the development of the rented sector would affect the future development of the corporate market and the mobility of "people in transit" or on contract from abroad. She said that ultimately the Government would lose out in Exchequer returns following a reduced housing volume demand.