The possible collapse of US mortgage lenders Fannie Mae and Freddie Mac has been averted after the government decided to bail out the two firms and take control of them.

Between them the pair underwrites over half of US mortgages and the rescue may provide new stability and confidence, helping in turn to ease the credit crunch.

Such a boost in the US could have beneficial effects for those investing in the Florida property market or the California property market, while elsewhere in the world the prospect of greater security has already seen Asian stocks rally in early Monday trading.

Commenting on this, Merrill Lynch’s head of Asia debt origination Jon Pratt, who is based in Hong Kong, told Bloomberg the move could help restore "long-term confidence" in the international money market, helping to ease liquidity issues.

An upbeat response is also expected in the City of London today, according to Graham Neale, a spokesperson for private stockbrokers Killick & Co.

He told the BBC: "The markets are certainly going to rally today because investors are going to say ‘maybe we can see light at the end of the tunnel in terms of the credit crunch’."

Visit Rightmove Overseas for the best selection of USA property. Stop dreaming, start searching!