The Firstbuy Direct scheme will help buyers struggling to get a deposit together, the opportunity to take up a five-year interest-free loan of up to 80% of the deposit, reported the Financial Times.
The scheme is set to fill the gap left by the withdrawal of the Labour government’s Homebuy Direct Scheme, which ended last autumn.
Borrowers will have to be first-time buyers earning less than £60,000 jointly and must be after a new build property.
The scheme, co-funded by the Treasury and housebuilding industry, will offer first-time buyers equity loans worth 20% of the value of the new home.
A first-time buyer buying a house typically has to find a deposit 25% of its value. It means those qualifying for the scheme have to find 5% themselves, while the government and homebuilder both put in 10%.
The loan will be interest-free for five years and will then be a below market-rate of interest.
The Chancellor hopes the move will help revive the property market and create 40,000 jobs in the house building industry.