A clutch of major high street banks plunged back into the 95% mortgage market today lured by £12 billion worth of guarantees from the Government as it launched the latest phase of the Help to Buy scheme.
Treasury officials believe the initiative will cost taxpayers nothing as lenders will pay a fee for the guarantee, which will underwrite up to 15% of a property's value.
HSBC today joined the Royal Bank of Scotland, NatWest, Halifax and Bank of Scotland, Virgin Money and the Aldermore Bank by signing up to the scheme.
Prime Minister David Cameron welcomed HSBC's move, calling it "good news" on Twitter:
I'll be launching #HelptoBuy later-it's wrong that many people on the average wage can't buy the average house or flat. We are helping them.
At the moment the lowest rate available for borrowers is being offered by Royal Bank of Scotland and NatWest at 4.99% for a two-year fixed rate deal with no fee, while Halifax is offering a similar deal with a 5.19% rate and a £995 product fee.
Chris Leslie, shadow chief secretary to the Treasury, said that if the Government is serious about helping first-time buyers "they should bring forward investment to build more affordable homes."