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Chancellor Rishi Sunak has allocated 拢5.2bn of government funding for the two-year Help to Buy scheme due to start in April.

Treasury documents issued following yesterday鈥檚 Spending Review said the support scheme, under which home buyers are offered an equity loan of 20% to pay for the bulk of a deposit in a new build, will be given 拢2.2bn in the next financial year and 拢3bn in 2021-22.

The funding appears to be a reduction from the amount originally allocated to the scheme when it was announced by the then chancellor Philip Hammond in autumn 2018. At the time, Treasury documents suggested the scheme would be allocated 拢8.5bn over the two years.

But it is broadly on a par with spending on the scheme to date. According to the latest statistics, 拢16bn was spent on Help to Buy equity loans in the first seven years since it was set up in 2013, at a rate of 拢2.3bn per year.

The documents said the funding allocation was based on 鈥渓atest forecasts of uptake and will be kept under review鈥�.

The new scheme, which is set to replace the existing Help to Buy scheme in April, is set to be less generous as it will be restricted to first-time buyers, who will only be able to use it to buy homes below a regional price cap set at 1.5 times the value of average first-time buyer prices.

The government said last week that it will open the new scheme to purchasers next month. Housebuilders have reported high demand for Help to Buy, given the reluctance of mortgage lenders to offer loans at high loan-to-value rates in the wake of the pandemic.

The current scheme has assisted the purchase of 273,000 properties with a value of over 拢73bn up to March this year.

The funding for Help to Buy is in addition to the 拢7.1bn National Home 好色先生TV Fund announced by the chancellor yesterday. This included 拢2.3bn of new money for housing, the bulk of which will be ploughed into the government Help to Build programme, which supports self and custom-builders in the same way that Help to Buy supports new build purchasers.