The scheme consists of two separate components: a £3.5bn shared equity scheme for the purchase of new build property and a £130bn government-backed mortgage indemnity scheme available for buyers of any home.
George Osborne, Chancellor of the Exchequer, said: “The deposits demanded for a mortgage these days have put home ownership beyond the great majority who cannot turn to their parents for a contribution.
“That's not just a blow to the most human of aspirations - it's set back social mobility and it's been hard for the construction industry.”
He added: “This Budget proposes to put that right - and put it right in a dramatic way.”
Shared equity loans worth £3.5bn
The shared equity element of Help to Buy will offer an equity loan worth up to 20% of the value of a new build home to anyone looking to move up the housing ladder.
The loan will be granted on the condition that the purchaser puts down a 5% deposit from their own savings and will remain interest free for the first five years.
The loan does not need to be repaid until the home is sold.
Previously help was only available to those who were first-time buyers with family incomes below £60,000, a condition which is not attached to the Help to Buy scheme.
The only constraint is that the home can't be worth more than £600,000 which, the Chancellor said, will cover well over 90% of all homes.
He said: “It’s a great deal for home buyers, it’s great support for home builders.”
Mortgage Indemnity Guarantee worth £130bn
The second element of Help to Buy is a government-backed mortgage indemnity guarantee scheme.
This will be available for all lenders to help them provide more mortgages to all types of home owners who can't afford a big deposit.
Using the government's balance sheet to back these higher loan to value mortgages will increase their availability to the market.
Osborne said: “We've worked with some of the biggest mortgage lenders to get this right. And we're offering guarantees sufficient to support £130 billion of mortgages.”
The scheme will be available from the start of 2014 and will run for three years.
