The £200 million scheme could provide 1,000 homes that can either be rented out by social landlords or offered to mortgages.aspx" title="first-time buyers">first-time buyers.

The move could give renewed hope to first-time buyers who can purchase the properties through the existing Homebuy scheme.

According to the government, the scheme forms part of a wider plan to assist first-time buyers struggling to get to the property ladder.

The plans forms part of the Government’s “Preparing Britain for the Future” initiative, which will also provide an additional £100 million for shared equity schemes.

The Government said access to the schemes will be extended beyond key workers, to all first-time buyer households with an income under £60,000.

The new proposal has received praise from Council of Mortgage Lenders (CML), however, they also warned that the scheme should not be used to single out key workers for special treatment.

CML said the Government should remove any loophole that could have key workers getting preferential treatment at the expense of other workers on low income.

The CML said they did not expect the changes to have a significant impact on the housing market.

The scheme has already been hailed as good news for housebuilders who will be able to offload some of their stock.