Speaking this weekend ahead of his Budget on Wednesday, the Chancellor said extending equity loans to buyers would help to deliver 120,000 extra new homes and added a further £6bn to the scheme.

The scheme, which now supports up to 30% of all new build homes in England, is credited with driving the recovery in house building.

In an interview on the Andrew Marr Show on the BBC, Osborne said: “I want to extend the Help to Buy scheme for newly built houses.

“It was going to end in 2016. We are now going to extend it for the rest of the decade. That would mean 120,000 new homes.”

The Help to Buy: equity loan scheme has so far helped over 25,000 households to afford to buy or reserve a new-build home. Until now the plan was to set aside £3.7bn for the scheme by 2016.

Under the two-part Help to Buy Scheme, buyers of new homes worth up to £600,000 can seek equity loans from the government. The Government also offers separate guarantees to encourage lenders to offer mortgages to people with just 5% deposits.

Executive chairman of the Home Builders Federation Stewart Baseley said: “We warmly welcome the Chancellor’s commitment to extend the Help to Buy Equity Loan scheme.

“Help to Buy has reinvigorated the home building industry, contributed to a sharp increase in new housing starts and allowed thousands of first-time buyers onto the housing ladder.

“We hope that other parties will be able to ensure that a political consensus is in place before the election to allow builders to get on with planning their businesses and employing the necessary apprentices to help tackle the country’s worsening housing crisis.”