The scheme, which has been widely promoted by the Prime Minister Boris Johnson, as part of his plan to turn ‘generation rent into generation buy’, is aimed at helping buyers who are only able to get a small deposit together.

It comes at a time when mortgages for borrowers with 5% or less to put down on a house are virtually non-existent, expect in shape of specialist guarantor schemes.

While it has come  as no surprise the chancellor is planning to unveil the new scheme, which has been eagerly awaited by the industry, there is concern it might cause house price inflation – something which would price many first-time buyers out of the market.

It is expected the scheme will be available to all borrowers, not just first-time buyers, for both new build and existing properties up to £600,000.

Phil Bailey, sales director at mortgage technology provider Twenty7Tec: “Mortgage activity levels since the stamp duty announcement have remained consistently high. Pushing up house prices, creating more competition and higher demand in the first time buyer market.

“A potential 95% LTV mortgage scheme, backed by the [government] and sitting alongside help to buy would go a long way in providing lenders with the confidence they need to further support this area of lending.

“Right now, lenders continue to be cautious and although we have seen an increase in 90%+ products to market (more than doubling since June), affordability, criteria and increased difficulty in securing these higher-risk mortgages continue to be challenging for many, especially those stepping onto the property ladder for the first time.

“If the government wants to achieve its new homes target at any point, a scheme to support the buyers of these properties is required.

Boost for buyers

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “This, coupled with the extension of the stamp duty holiday, will result in a Budget which is a real boost for buyers.

“It is positive news for first-time buyers, particularly as it is not restricted to new homes, although critics may argue that it will only aid house price inflation.

“But without such a scheme would developers be so keen to put spades in the ground? The supply of new housing is nowhere near where it needs to be to satisfy demand.”