Video report by ITV News Political Correspondent Hannah Miller
A mortgage guarantee scheme aimed at helping aspiring homeowners with small deposits onto the property ladder and firing up the market was announced in Wednesday's Budget.
Under the new plans, buyers will be able to purchase properties worth up to £600,000 with a deposit of just 5%.
The scheme will be open to both first time buyers and current homeowners.
The scheme, which will be subject to the usual affordability checks, will be available to lenders from April.
Lenders are typically less likely to approve mortgages when such a small deposit is put down, due to fears the home buyers will not be able to pay the full amount back.
The economic impacts of the coronavirus pandemic mean that low-deposit mortgages have "virtually disappeared", according to the Treasury.
The government plans to incentivise lenders to provide these low-deposit mortgages by offering them the guarantee they require to provide mortgages covering the remaining 95%.
Prime Minister Boris Johnson said the plans are to help "generation rent to become generation buy", adding: “Young people shouldn’t feel excluded from the chance of owning their own home and now it will be easier than ever to get onto the property ladder.”
The low-deposit mortgage scheme will be seen by many as a move by the Conservative Party to appeal to younger voters, many of who say they are struggling to enter the property market due to ever-increasing prices.
The government's plans are based on the Help to Buy mortgage guarantee scheme introduced in 2013 by David Cameron and George Osborne, that ran until June 2017.
Aiming to reinvigorate the market following the 2008 financial crisis, that scheme was said to have helped more than 100,000 households buy a home across the UK.
But there were also concerns that it artificially inflated prices and housebuilders’ profits.
Mr Sunak said: “Owning a home is a dream for millions across the UK and we want to help as many people as possible. Saving up for a big deposit can often be difficult, and the pandemic has meant there are fewer low deposit mortgages available.”