The move by Government to guarantee risky mortgages is a big victory for the campaign and in particular the Home Builders Federation, which together called for the measure to get the housing industry back on its feet.
Banks will now be protected against losses if they offer mortgages to buyers with only a 5% deposit who are buying new-build houses worth up to £500,000.
So far only seven of the major house builders have managed to navigate the legal procedures to put the NewBuy mortgage in place.
But it is hoped the measure will eventually deliver a big housing stimulus and create 50,000 construction jobs.
David Cameron will also highlight plans to separately offer two million council tenants subsidies of up to £75,000 in the biggest extension of Margaret Thatcher’s flagship right-to-buy policy for decades.
For every home sold, the Government pledges to build a new ‘affordable’ home.
Mike Leonard, spokesman for the Get Britain Building Campaign, said: "We identified that the lack of mortgage finance, particularly for first time buyers was proving a major barrier to home ownership.
“We had moved from reckless lending to the requirement for 20% mortgages and in doing so we had excluded many people from the market.
“The average age of a first time buyer continues to increase with all the social economic issues that result.”
He said that announcement showed Government was recognising the need to invest in housing to stimulate growth and jobs.
“The HBF should be congratulated for the work they have led to turn the success of our campaign into a product that will see the re-introduction of the 95% mortgage.
“We hope that over time the scheme can be simplified to it make it more accessible to all potential buyers of homes built by developers of all sizes.”
He also warned that talk of a recovery in the housing sector had to be put in context.
“Delivery has now fallen below 100,000 against the widely acknowledged requirement for plus 200,000 per annum. Homelessness is also increasing as repossession and rent rises in the private rented sector take hold.
“Added to this, smaller developers are being frozen out of the market through lack of finance, and manufactures continue to close with capacity and skills being lost forever.”
Leonard said: “For now we should welcome the NewBuy scheme as evidence that the Government is recognising that we need to do even more to Get Britain Building using products made in the UK and as result return to growth and full employment.”
