It was forced to issue the statement following reports late last week that it had begun a review of the scheme which could lead to it being ended early.
The report prompted shares in house builders to drop sharply on Friday morning as around 35% to 40% of new build homes are purchased using Help to Buy.
In its statement, the Department for Communities and Local Government (DCLG) said: “We remain committed to the Help to Buy equity loan scheme to 2021, ensuring it continues to support home buyers and stimulate housing supply.
“The government also recognises the need to create certainty for prospective home owners and developers beyond 2021, so will work with the sector to consider the future of the scheme.”
DCLG added that the department regularly reviewed the Help to Buy equity loan scheme, with the last review taking place in 2015.
“To infer from this that the Help to Buy equity loan scheme will be cancelled is simply incorrect,” it concluded.
Speaking at the MyHomeMove conference in May, Barratt Homes’ head of mortgage lender relations Adrian MacDiarmid said the business was already planning developments for 2021 with the expectation the scheme would end.
“Land we are buying now we won’t be building units on until 2021 – so we’re taking decisions now based on the lack of availability of Help to Buy,” he said.