Through an exchange of letters with Mark Carney, governor of the Bank of England, the Chancellor said: “There are now over 30 lenders offering 90-95% loans outside the scheme. This reflects the fact that the scheme was introduced with a specific purpose that has now been successfully achieved and, as such, I can confirm that that it will close to new loans at the end of 2016 as planned.”

The confirmation comes as results released today showed 79% of all mortgages purchased under the Help to Buy: Mortgage Guarantee Scheme came from first-time buyers since the scheme launched in 2013.

Richard Sexton, director of E.surv, said: “It will be interesting to see how this move affects transaction levels over the coming months, and how lenders and borrowers alike react to the change.

“While the housing market is certainly on the road to recovery, we are not out of the woods yet, and the industry and the government need to work together to ensure the market remains accessible to those looking to take their first steps onto the ladder.”

The Chancellor stressed the government remains committed to supporting those who are looking to get on the property ladder and that the Help to Buy: ISA and Help to Buy: Equity Loan schemes will both remain available to new borrowers.

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At its peak in 2014, the Help to Buy: Mortgage Guarantee scheme enabled 4,632 mortgages loans to be agreed before declining to 2,973 in April 2016.