First-time home buyers have been given good news after the Government outlined plans to breathe life into the ailing housing market and boost the construction industry.
A new help-to-buy scheme for those struggling to find mortgage deposits will include £3.5 billion for shared equity loans, and a Government interest-free loan worth 20% of the value of a new-build house.
The Chancellor said the scheme will be available to everyone who wants to buy a home from next year.
A new mortgage guarantee, sufficient to support £130 billion of loans, will help people who cannot afford a big deposit.
The Government will also offer interest-free loans for five years for those wanting to buy new-build homes.
The loans will be available to those who can find a 5% deposit with the loan worth up to 20% of the value of a home worth up to £600,000 and repayable when it is sold.
The announcement was cautiously welcomed by lenders and estate agents, and the share prices of some housebuilders went up by as much as 7%.
The initiative broadens out a previous scheme called First Buy, which has been offering equity loans to first-time buyers only. Help-to-buy offers a helping hand to home movers as well as first-time buyers.
Stephen Noakes, mortgage director at Lloyds Banking Group, said the new initiative could prove vital to people who are struggling to take their second step on the housing ladder, many of whom bought at the height of the market and now find themselves trapped with little equity.
He said: "Our recent report from Lloyds TSB indicates that little has improved in the past year for those first-time sellers looking to take the second step on the housing ladder, almost two thirds of second steppers had wanted to move up the ladder in 2012 but were unable to."