The Government’s Starter Homes scheme has been named as the most generous initiative to get people on the property ladder.

A report commissioned by the Council of Mortgage Lenders, ‘Government Housing Schemes: Accident or Design’, found that Starter Homes, which provide first-time buyers under the age of 40 a new-build from developers on brownfield sites, were the most useful financially, followed by the Help to Buy Equity Loan scheme.

The report used an illustrative example of a budget of up to £1,025 per a £10,000 deposit and a maximum mortgage and mortgage payment of 6.5%, to assess which scheme provides the highest value property.

The report says: “It is only as you become affordability constrained and unable to access home ownership on the open market through the Starter Homes scheme or Help to Buy Equity Loan, that you should consider shared ownership, which at current interest rates is less generous.

“This is also relevant to the question of the household type and how important a bigger house with more bedrooms is accordingly – if a household needs a bigger house it is more likely to be affordability constrained than if it only needs a more modest dwelling. Locality is the other key bearing on the affordability constraint.”

“If you are a social housing tenant, want to enter home ownership, and can afford your Right to Buy, then you should exercise it. Shared ownership is unlikely to be a better option financially unless there are real affordability constraints with the Right to Buy, such as when the cash cap vastly reduces the effective Right to Buy discount available rendering the Right to Buy an unviable option.”

The report also reveals pricing points and regional differences with certain schemes.

The chart shows that the average Help to Buy Equity Loan home pricepoints (blue dots) are the highest of the Government schemes apart from in London where they are slightly below Shared Ownership prices (grey dots).

In all other regions, average shared ownership price points are generally second highest, while Help to Buy Mortgage Guarantee (orange dots) which are generally third. Average Right to Buy price points (yellow dots) are without exception the lowest of all the schemes.

The report says: “When it comes to supporting housing supply, the Government’s flagship Help to Buy: Equity Loan is not boosting supply in the parts of the country that need it the most. Clearly there is a bias towards the north and away from London in particular and this is likely to explain why the Government has ‘evolved’ Help to Buy Equity Loan further, to create London Help to Buy.

“Perhaps more still could be done to re-orientate the scheme’s effectiveness and take-up in the south and outside of the capital.”

* Gross mortgage lending fell 5% year-on-year in October, but was steady on a monthly basis, the CML has said.

It estimates gross mortgage lending was £20.6bn, close to the £20.5bn lent in September 2016.

Responding to the figures, Paul Smith, chief executive of haart estate agents, said:  “Despite mortgages rates reaching historic lows since the Bank of England’s decision to cut base rates in August, lending remains subdued.

“This comes as transaction rates continue to suffer on the month and on the year, due to a lack of housing stock coming onto the market, as sellers and house-builders continue to move with caution in the volatile market and unpredictable socioeconomic environment.

“Philip Hammond must listen to the choir of calls from the industry to ease market conditions and take action in the Autumn Statement.

“A cut in Stamp Duty would make a huge difference to first-time buyers and abandoning the surcharge would also get landlords to start buying again, increasing the supply of rental properties too.

“An active property market has benefits for the wider economy, and so we should stop penalising first-time buyers, families and landlords for aspiring to buy.”