The government is reportedly considering the introduction of a first-time buyer scheme that will see long-term fixed-rate mortgages made available at 95 per cent LTV.

Prime minster Boris Johnson spoke to The Telegraph ahead of the conservative part’s virtual conference this weekend, in which he said: “I think a huge, huge number of people feel totally excluded from capitalism, from the idea of home ownership, which is so vital for our society. And we’re going to fix that – ‘Generation Buy’ is what we’re going for.”

He added: “We need mortgages that will help people really get on the housing ladder even if they have only a very small amount to pay by way of deposit, the 95 per cent mortgages.

“I think it could be absolutely revolutionary, particularly for young people.”

The Telegraph reports that Johnson has asked ministers to design such a plan, which would involve removing stress tests for mortgage applicants.

It says that the government may extend “a form of state guarantee” to lenders in an effort to de-risk the loans.

The Help to Buy scheme ends in March 2023 after receiving a series of extensions, and there has been much talk about what type of scheme – if any – could replace it.

Just last week, Intermediary Mortgage Lenders Association executive director Kate Davies told Mortgage Strategy that “Enabling borrowers to buy with 5 per cent deposits would help to open up the mortgage market beyond just new-build – which has got to be a healthy development.

“Ima is aware that there are now well-developed plans to launch schemes which could do just that – and we shall watch with interest and anticipation as they come to market. They may be very effective in facilitating lending and getting more borrowers onto and up the ladder.”

On the rumoured “Generation Buy” scheme, Thinktank the Centre for Policy Studies director Robert Colvile comments: “Home ownership is a near-universal aspiration in the UK, yet the younger generation has been left behind… fixed-rate, long-term, low-deposit mortgages are key to helping first-time buyers to afford a home.”

However, the talk is not without its critics. For example, Homelessness charity Shelter chief executive Polly Neate says: “The prime minister needs to stop selling pipedreams and start facing reality. The only way we will make a dent in the housing emergency is by increasing the number of secure and genuinely affordable homes, and that means building decent social housing.”