The Chancellor said the scheme will be available to everyone who wants to buy a home, old or new, under the Help to Buy scheme from 2014.
He will help people get on or move up the property ladder by offering Government “mortgage guarantees” totalling £130 billion. Prospective buyers would contribute 5 per cent of the value of the property and the Government will guarantee another 15 per cent.
This will mean people can afford a bigger mortgage with a small deposit. Effectively, the buyer would be getting a 95 per cent mortgage where the bank might currently only have lent them 80 per cent of the value of the property.
Many people have struggled to save up enough since banks scrapped their best mortgage lending deals after the financial crisis.
NEW HOME INITIATIVE
In a separate part of the initiative, the Government will offer interest-free loans for five years if people want to buy new-build homes.
The loans will be worth up to 20 per cent of the value of a newly built homes, with the buyer contributing 5 per cent as a deposit.
They will be available to anyone who wants to buy a new-built home worth up to £600,000 and repaid only when the property is sold.
The Help-to-Buy schemes will support millions of people who currently cannot afford deposits to buy a new home, as long as they pass credit checks.
Previous schemes have only helped first time buyers and those with an income of less than £60,000.