The Government is facing calls to clarify the future of its Help to Buy Equity Loan scheme to prevent a "destabilisation" of the housing market.
Ahead of the upcoming Budget, the Intermediary Mortgage Lenders Association (IMLA) warned withdrawing Help to Buy funding would risk "significant" market disruption which could leave many first-time buyers unable to get on the property ladder.
The equity loan scheme is due to end in 2021 and is only available for new build properties, offering a government loan of up to 20 per cent of the home’s value.
IMLA said the Help to Buy scheme helped return first-time buyer lending to pre-financial crisis levels, reporting 170,000 new homes built in England since the scheme’s introduction in 2013 - 81 per cent of which were first-time buyers.
The organisation, which represents 43 banks, building societies and specialist lenders, wrote to the Chancellor of the Exchequer in September outlining its concerns.
Kate Davies, executive director at IMLA, said there was concern no clear signal had been given as to what might replace the Help to Buy scheme after 2021.
She said: "Given its success - and its importance in boosting both home ownership and housing supply - we believe that some form of government support should continue.
"Lenders and borrowers place heavy reliance on the scheme, and a major step-change to arrangements would risk significant market disruption and potentially undermine the Government’s ambitious targets for new housing supply."
Ms Davies said lenders would need enough notice of any proposed changes to plan ahead.
She said: "Hence our wish to have clarity as soon as possible on the Government’s intentions.
"We look forward to hearing the Government’s plans and to working closely to continue the development of what has become a key element of housing policy."
An IMLA spokesman said the body was pleased to see the positive reference to the Help to Buy scheme made by the Chancellor at the Conservative Party Conference earlier this month.