Javid announced the move speaking at the Home Builders Federation policy conference where he also called the housing market “broken” and highlighted problems with new-build properties for which there was “no excuse”.
Highlighting the often unnecessary and poor use of leaseholds by house builders, Javid said he was prepared to take action to force the market to change.
“The last thing I want to do is tie the industry up in more red tape at a time when supply is already so far short of demand,” he said.
“But as a government committed to building a fairer society, I don’t see how we can look the other way while these practically feudal practices persist.
“So I will look to ensure Help to Buy equity loans are only used to support new-build houses on acceptable terms.
“This will send a serious message to the building industry: if you want the government to help you build and sell homes, you have to sell them on fair terms. And that’s what all this is ultimately about – helping people find homes,” he added.
The Department for Communities and Local Government has not yet confirmed to Mortgage Solutions what the acceptable terms will be.
Last month brokers warned that the financial welfare of Help to Buy equity loan homeowners was already being put at risk by a shambolic remortgage market, with a lack of product choice, high fees and poor service.