The Chancellor plans to reinvigorate the right-to-buy council homes programme, describing it as “one of the greatest social policies of all time”.
The policy, closely associated with former Prime Minister Margaret Thatcher in the 1980s, had been “slowly and stealthily strangled” by the last government, George Osborne said.
The Government forecasts an extra 100,000 sales could be made as a result of its new schemes, with those wanting to buy their council homes being offered discounts of up to 50 per cent.
For each home purchased, the Government said it will provide an additional affordable home.
The Government also plans to help first-time buyers by underwriting mortgages on new-build homes to make the “dream of home ownership” a reality for more people.
It is hoped the scheme will allow people to purchase newly-built homes with deposits of around five per cent rather than the 20 per cent now regularly demanded by commercial lenders.
Many would-be first-time buyers have found themselves trapped in the rental sector as they cannot raise the large deposits needed.
Lenders have gradually been bringing back deals needing lower deposits but there are complaints that many are finding the terms too restrictive and also fears of the eurozone crisis pushing borrowing costs up.
John Cridland, CBI director-general, said: “Unfreezing the housing market is an important step on the confidence-building ladder. Mortgage indemnity guarantees are the best way to bridge the problem of loan-to-value ratios.”
There is currently a stamp duty concession for first-time buyers but this is due to end in March next year.
Mr Osborne kept the timetable despite calls to extend the date or risk distorting the already fragile market
Building Societies’ Association director-general Adrian Coles said that despite the recent announcements by Ministers on housing strategy “it feels as though the Government is giving with one hand, whilst taking away with another”.
He added: “It is disappointing that the Government has decided not to extend the stamp duty holiday for first-time buyers on properties under £250,000.”
Nicholas Leeming, business development director at property website Zoopla.co.uk, said: “If the Government is serious about helping people get onto the housing ladder then underwriting loans and increasing supply should have been introduced to support the stamp duty holiday, not replace it.”