Banks have begun to unveil mortgages which they will offer under the expanded Help to Buy scheme, the government-backed initiative to enable buyers who can afford only small deposits to buy a home.
RBS, NatWest and Halifax will start taking applications this week and Virgin Money will join from January.
There have been concerns the scheme could fuel a housing price bubble, but the Government has dismissed talk of a UK price boom.
RBS and NatWest are offering a two-year, fixed-rate mortgage starting at 4.99% for those offering a 5% deposit, with no fee. Halifax will be taking applications in a few days at a rate of 5.19% with a £995 fee for those offering the same deposit.
Guarantees
The scheme is getting under way as surveyors report their sales levels are at their highest for nearly four years.
The Royal Institution of Chartered Surveyors (Rics) said a large majority of surveyors were expecting house prices to rise.
The first phase of the Help to Buy scheme in England started in April, when buyers of newly built homes were eligible for a 20% equity loan from the government on top of their 5% deposit.
Under the second phase, buyers only need to provide a small deposit, with the government offering a guarantee of 15% of the loan to the lender - for a fee - to encourage the bank or building society to offer the loan. That fee charged to the lender is expected to be up to 0.9% of a property's sale price. This is a one-off fee.
Checks will still take place to ensure that those who apply are able to make the mortgage payments. The scheme will be available for first-time buyers and home movers borrowing to buy new and old homes valued at no more than £600,000.
It means a buyer looking to purchase a home costing £200,000 would have to put down a deposit of around £10,000. Demands have been much higher than this for many first-time buyers since the start of the financial crisis, usually about 20% of the value of a home.
Prime Minister David Cameron announced at the Conservative Party conference that the second phase of the scheme would be brought forward by three months from January.
But an influential group of MPs has echoed concerns about the potential effect of the Help to Buy scheme. The Treasury Select Committee said that great care was needed from the government when setting up and running the scheme. "Mistakes could distort the housing market or carry threats to financial stability," it said.
"We continue to believe that the government of the day will face strong incentives to extend the scheme, with the attendant risk that the mortgage guarantee scheme becomes a permanent feature of the UK mortgage market."
Last month, Chancellor George Osborne asked the Bank of England's Financial Policy Committee (FPC) to make annual reviews of the scheme, starting next September.
