The new help to buy scheme allows people to purchase a new build home in the capital with a 5% deposit and a mortgage for 55% of the purchase price. The remaining 40% will be backed by an equity loan from the government. This loan will be interest free for the first five years.
The scheme is available to both first time buyers and home movers who are buying a home in any London borough but can only be used on new build properties up to the value of £600,000.
There are various requirements regarding the occupation and sale of the property but the existing help to buy scheme was launched in 2013 and has helped over 130,000 people buy their own home.
The current scheme which is available across the UK offers loans for 20% of the property value and the new London help to buy scheme doubles this loan to 40%. The London help to buy scheme is open until December 2016 but the existing scheme has been extended to 2021 with a further £8.6 billion funding.
In a recent government announcement chancellor George Osborne said: "This government is determined to help more people realise the dream of owning their own home. Our help to buy scheme has already helped tens of thousands get a step onto the housing ladder, and the help to buy isa means many more will get a top up from the government as they save for a deposit."
"And to ensure there are more homes to buy for people across the country, in my Spending Review I set out plans to deliver the biggest affordable housebuilding programme since the 1970s," said Osborne.
Planning expert Richard Ford of Pinsent Masons, the law firm behind Out-Law.com, said: "The London help to buy isa is good news for home buyers in London. It is welcome that the eligibility levels are higher than the proposed new thresholds for starter homes for the under 40s in the Housing and Planning Bill. I would like to see those thresholds increased for starter homes in London too."