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Chancellor George Osborne has announced a major new scheme designed to kickstart the housing market.

Osborne told MPs that the 鈥楬elp to Buy鈥� scheme would be an offer to the 鈥渁spiration nation鈥� to meet the natural desire of people to own their own homes.

He said Help to Buy comprised two major parts.

First, a 拢3.5bn capital spend over the next three years on shared equity loans to allow homebuyers an equity loan worth up to 20% of the value of a new build house.

And second, in what Osborne called a first for the UK, a new Mortgage Guarantee designed to allow lenders to provide more mortgages to all those without a large deposit.

This would use the government鈥檚 balance sheet to back 拢130bn worth of higher loan-to-value mortgages.

The chancellor said: 鈥淭he 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鈥檚 not just a blow to the most human of aspirations 鈥� it鈥檚 set back social mobility and it鈥檚 been hard for the construction industry.

鈥淭his Budget proposes to put that right 鈥� and put it right in a dramatic way.鈥�

Referring to the equity loan component of Help to Buy, Osborne said previously help was only available to those who were first time buyers, and who had family incomes below 拢60,000.

He added: 鈥淣ow help is available to all buyers of newly built homes on all incomes. Available to anyone looking to get on or move up the housing ladder.

鈥淭he only constraint will be that the home can鈥檛 be worth more than 拢600,000 鈥� but this covers well over 90 per cent of all homes.

鈥淚t鈥檚 a great deal for homebuyers. It鈥檚 a great support for home builders. And because it鈥檚 a financial transaction, with the taxpayer making an investment and getting a return, it won鈥檛 hit our deficit.鈥�

The Department for Communities and Local Government (DCLG) said the 拢3.5bn Help to Buy: Equity Loan scheme would help 74,000 homebuyers purchase a house with a 5% deposit by 2016.

DCLG said it would expand and replace the FirstBuy model, which is currently aimed at first-time buyers purchasing new build properties.

DCLG said that under the new scheme existing homeowners would also be eligible to receive a 20% equity loan that would help them buy a new build property, with prospective buyers receiving support to purchase properties from a participating housebuilder with a value of up to a 拢600,000.

DCLG said a separate option, called Help to Buy: Mortgage Guarantee, would enable lenders to use 拢12bn of government-backed guarantees to offer mortgages with smaller deposits, as little as 5%, on new and existing properties.

Where properties are bought under this option, the government would provide security for the loan, so if the house is then sold for less than the outstanding mortgage total the lender will be able to recover its loss, DCLG said.

Osborne also announced that the Build to Rent Fund would be increased to 拢1bn to support the construction of new homes specifically for private rent.

Osborne also announced that the government would double the funding for the Affordable Homes Guarantees Programme to 拢450m, with up to 30,000 affordable homes to be delivered through the expanded programme, with all new homes started on site by the end of March 2015.