The second part of the Help to buy scheme, the mortgage guarantee element, has faced continued criticism since Chancellor George Osborne announced it during the Budget in March.

The guarantee is due to be launched in January 2014.

A progress report took place between Osborne, treasury officials, mortgage lenders, trade bodies and housebuilders yesterday.

Following the meeting, the Council of Mortgage Lenders (CML) outlined several issues that still need to be resolved.

The trade body said that no agreement had been made on the commercial fee lenders would be charged for participating in the scheme nor had any details been finalised on what capital reliefs will be afforded to banks and building societies.

The CML added that only after further details have been confirmed would lenders be able to make ‘an informed choice about their participation’.

CML director-general Paul Smee said:

“The mortgage market is open for business, and it is clear that government support has helped to create more favourable market conditions for home-buyers.

“Lenders, whether they choose to participate in the guarantee scheme or stay outside, will continue to do their utmost to meet households’ needs for mortgages, but always in a way that is responsible.”

The trade body added the scheme must be straightforward for lenders to implement and administer given the short timescale available before launch, must have a clear success criteria, clear exit strategy and be accompanied by an equivalent government focus on the supply of new housing to avoid a house price bubble.

It was also reported that the scheme would only be accessible by those who had a credit rating in the UK. This alone will not limit the scheme to British nationals as foreigners living in the UK are able to build a credit history once they enter the country.

Chancellor of the Exchequer George Osborne later reiterated his expectations for Help to Buy but failed to give any further details about the scheme.

“It is aimed directly at families who can’t afford to move up on the housing ladder and can’t afford to buy their first home because of problems in the mortgage market, not because they themselves can’t afford a home,” he told the BBC.

“That’s what we are addressing, it is not for second homes, they won’t be allowed, and it is going to help a situation where the number of first-time buyers is half what it was five years ago.”