In his Budget speech today chancellor Rishi Sunak revealed Lloyds, Santander, Barclays and HSBC would be offering the government-backed mortgages for those with 5% deposits from April.

And others – including Virgin Money – would be following on shortly after, he said.

The announcement came just after the chancellor said he would be extending the stamp duty holiday until the end June, with reduced exemptions in place to the end of September.

Sunak said: “Even with a stamp duty cut there is still a significant barrier to people getting on the housing ladder.”

This scheme, he said, would provide a chance for those who can’t afford a big deposit to buy their own home.

It would be available to all borrower types – not just first-time buyers – on all properties up to the value of £600,000.

Michelle Andrews, HSBC UK’s head of buying a home said: “We’re delighted to once again be supporting the government Help to Buy scheme.

“Here at HSBC UK we’re committed to supporting people to get on to, or move up the property ladder.

“This scheme will make a real difference in enabling more first-time buyers and home movers, with a minimum of 5% deposit, to get the keys to their new home, and we’re excited to play our part in it.

“Our team of dedicated mortgage advisors will be ready to provide expert advice and guidance on this scheme from the 19 April.”

‘Transformational’

Guy Harrington, CEO of residential lender Glenhawk, said: “The government should be applauded for helping not just first-time buyers, but current homeowners, and for including older stock in the eligibility criteria.

“For many Brits their home is their castle and for too long, too many have been priced out the market; the more that can experience that feeling of putting the key in the lock for the first time the better.

“First-time buyers in particular, for whom this measure will be a game changer, are the roots of the market and nurturing them will only benefit the rest of the housing tree.”

Meanwhile William Scoular, head of private client lending at Investec Real Estate, said it was ‘transformational’.

“This intervention marks a reinvigoration in government thinking,” he said.

“With affordability remaining the key issue, homeownership has failed to keep pace with the maturing and increasingly accessible private rental sector and by including current homeowners and older stock, this intervention has the potential to be transformational for the market.”

‘Band aid on a bullet wound’

Others, however, were not convinced the new Help to Buy scheme would go far enough to fix the UK’s housing affordability problems.

Nigel Purves, CEO of Wayhome, said: “The headline-grabbing 95% mortgage policy is politically astute, but it is a band-aid on a bullet wound.

“The affordability issue for renters goes much deeper than the deposit. Mortgage lenders calculate their lending by multiplying household income – and with the average house price in England coming in at just under £270,000, it means that you’ll need quite a hefty household income to get a 95% mortgage to afford to buy it.

“If the government is truly committed to turning Generation Rent into Generation Buy, it must work together with the property industry to raise awareness of innovative ways to help people take their first step onto the homeownership ladder.”