The Help to Buy scheme has helped almost 6,000 people in London buy a new home since it was introduced in 2013.
However, this only accounts for 1% of the overall take up, which has been attributed “high house price growth” in the capital.
Chancellor of the Exchequer George Osborne said: “Key to our long term plan is providing economic security for working people, at every stage in life. The security of owning your own home is a big part of this, which is where Help to Buy comes in. It’s also boosting the economy more widely by driving an increase in house building in Britain, ensuring long-term housing supply and creating jobs.
“That’s why I committed £6 billion to extend Help to Buy to at least 2020, giving developers certainty so they can plan for future Help to Buy housing schemes and continue to boost housing supply. Today I’ve confirmed the first annual allocation of nearly £1.5 billion, providing funding for Help to Buy equity loan for 2016/17.”
This Autumn the Government will bring out the Help to Buy ISA, which the Chancellor announced in the March Budget. Under this scheme, first time buyers can save up to £200 a month towards their first home and the government will boost their savings by 25%, or £50 for every £200, up to a £3,000 bonus.