Chancellor George Osborne is extending the first phase of the Help to Buy scheme to 2020 ahead of his fifth Budget on Wednesday.
Speaking to the BBC yesterday, Osborne said he believed buying your own property was a crucial part of an individual’s economic security.
The first phase of Help to Buy allows borrowers with a 5 per cent deposit to secure up to a 20 per cent loan from the Government. The loan will be interest-free for five years and will be repayable on sale. To qualify, homes must be worth less than £600,000.
The scheme launched last April and was backed with £3.5bn towards shared equity loans over three years and expected to support up to 74,000 more homebuyers.
The Home Builders Federation said take up had started “like a train” and there were concerns it could run out of funds.
The Treasury says an extra £6bn will be available to build another 120,000 homes.
He said: “I want to extend the Help to Buy scheme for newly built houses – it was going to end in 2016; we are now going to extend it for the rest of the decade. That will mean 120,000 new homes.”
Osborne also revealed plans for a new “garden city” in Ebbsfleet with 15,000 new homes to ease housing pressure in the south-east.