Estate agents have given a cautious welcome to the plans announced in last week’s Budget to help people buy a home of their own.

Chancellor George Osborne announced various measures to help purchasers.

Help to Buy – a development of the current FirstBuy and NewBuy schemes – will take two forms.

Buyers can take an interest-free loan from the government, available from April 1, which will help people who want to buy a new-build property.

It is available to existing homeowners as well as first-time buyers.

Borrowers will need to raise a deposit of five per cent of the value of the property but can borrow a further 20 per cent on an interest-free basis. The biggest loan available will be £120,000.

The other part of the Help to Buy scheme sees the government acting as guarantor for some of a borrower’s debt.

It will provide the lender with a guarantee of up to 15 per cent of your loan – allowing it to offer a mortgage even though the deposit you have put down might be as little as five per cent (the minimum to take part in the scheme).

This will be available from January next year and will be available to buyers of old as well as new-build properties.

The loan and guarantee will be available for homes worth up to £600,000 and there will be no cap on how much you can earn to qualify.

Mark Hayward, president of the National Association of Estate Agents (NAEA) said the proposals are a help but more needs to be done.

“The NAEA has consistently called on the Government and the banks to look at more comprehensive ways to improve access to funding for prospective homeowners, especially for the important first-time buyer market.

“In the absence of a Stamp Duty Holiday for first-time buyers, it is imperative that politicians, the house building industry and the major lenders continue to look at more ways to offer support to this fragile part of the sector.”

The House Builders Federation (HBF) welcomed the proposals.

Stewart Baseley, executive chairman of HBF said: “A lack of affordable mortgage availability remains the biggest constraint on housing supply – something govern-ment now understands and is looking to address.

“Extending NewBuy to the secondhand market should create churn in the market place and drive up sales across the board – including for new homes.

“We do though need to ensure a level playing field across the whole market. “Extending FirstBuy is very welcome and will provide a real option for people currently unable to buy – so providing a vital market for the new homes industry.

“Government must be praised for its attempts to stimulate activity, but must also be wary to get the details right.”