As experts warn of entire generations being shut out of the housing market due to rising prices and extremely large deposits, the government has extended their Help to Buy scheme for first time and second time buyers. The new scheme offers loans of up to 40% on new build properties worth up to £600,000. The loan amount is double of the last scheme loan of only 20% offered by the government previously.

In London the scheme will allow a buyer into a home with a 5% deposit and a mortgage as low as 55%. It is hoped that up to 145,000 buyers will be assisted into homes in the capital where the current average price is £637,298.

Considering that the scheme is allowed for properties up to £600,000, and the average is above that level, those hoping to be helped out with the scheme will have to shop smartly.

Lawrence Hall of Zoopla, a website property lister, said, “With the average property value in London currently standing £637,298 and the scheme only applying to new build properties with a value of up to £600,000, buyers will have to look hard for an affordable London home.

"Zoopla calculations show that to make the most of the top price bracket property, a buyer would need to be earning a substantial £73,000 a year more than double the average London salary of around £35,000 to qualify for the mortgage of £330k, even with the government lending you 40 per cent. For a lower purchase price of £350k, buyers would still need a higher than average salary of £43,000 for a mortgage of £192,500.

"While the scheme extension is a move in the right direction, one has to question whether it’s benefiting London’s higher earners, rather than those who need it most.”