The government is reportedly mulling the backing of a 99% mortgage scheme for first-time buyers.
Not far off the 100% mortgages that were issued prior to the global financial crisis, the government-backed scheme would require first-time buyers to stump up a deposit of just 1% of the price of their first home purchase.
Ahead of the Budget in early March and a general election expected in the coming 12 months, Chancellor Jeremy Hunt and Prime Minister Rishi Sunak are said to be looking at this mortgage plan as a way of appealing to young voters, The Independent reported.
It is one of several ideas contemplated for unveiling in the spring Budget in six weeks' time.
The government already underwrites a scheme for 95% mortgages, though there have been reports that it has not seen a huge uptake.
Mortgage advisers said the scheme might sound good to younger voters struggling to buy their first property, but many cited concerns.
Kirsty Wells, director at Blueprint Mortgages & Protection, said: "It is amazing to have something to help first-time buyers get on the property ladder, especially those that have fallen into the rental trap and are unable to save a deposit.
"However, it makes me nervous that the property market only has to drop very slightly before the borrower is then in negative equity and a mortgage prisoner."
She said she had bought her first property by using an 100% mortgage in 2004 but a sharp fall in prices in 2008 made is "scary to then be in negative equity".
Rohit Kohli, director at The Mortgage Stop, said he was encouraged to see new ideas to help first-timers get onto the property ladder.
"But let's be honest, it feels a bit like slapping a plaster on a gaping wound. The real problem is a serious lack of affordable homes, and it's something that's been dodged for too long by a parade of housing ministers who seem to be in a competition for who can do the least," he said.
"The idea of only needing to scrape together 1% upfront is tempting, sure. But when you think about the sky-high interest rates that'll come with it, you've got to ask who can actually afford this."