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Mortgages offering a deposit of five per cent under a new government guarantee scheme won’t help first time buyers, a Sheffield expert says.

The policy, announced in the Budget, is designed for first-time buyers, but the launch comes as average house prices continue to rise to record levels. Some lenders such as Halifax which is part of Lloyds Banking Group, and Barclays have also said that these products will not be available for new-build properties.

Linda Crapper, consultant at Saxton Mee and a Member of the National Association of Estate Agents, said: “I don’t think it will help, especially as it is not being offered on new builds.

"I also think the interest rates are putting first time buyers off. Rather than offering a deposit of five per cent, it would be better to lower the interest rate along with the deposit.”

The average house price in Sheffield is between £220,000-£270,000. Would a 5% deposit help you buy this house, in Tulip Tree Close, Beighton, on the market for £235,000 with Purplebricks?

Some of the new mortgage rates are close to 4% for a two-year fixed rate deal, but Linda says these are too expensive.

"What is the point of helping out with one hand and taking it back with the other? It is a bit back-to-front,” she added.

New mortgage scheme for five per cent deposits 'won't help' says Sheffield expert