House prices have risen by more than 30pc in that time, meaning many young people are forced to pay a fine to withdraw money to buy a home.
Campaigners including Martin Lewis from Money Saving Expert have warned that the savings product is penalising thousands of young savers. The Government made £33m from withdrawal penalties in 2021/2022, according to HMRC data.
Ministers had also been drawing up plans for a 99pc-mortgage guarantee for first-time buyers struggling to save enough for a deposit, but abandoned the plans after a backlash from banks warning it was irresponsible.
Housing Secretary Michael Gove recently warned that young people would abandon democracy if they could not afford somewhere to live.
Experts have also said that spiralling housing costs are a key reason why the UK’s birth rate has fallen to a record low.
In a scramble for cash to fund tax cuts for millions of workers, Mr Hunt is understood to be considering a tax raid on non-doms, as first proposed by Labour, and extending the windfall tax on oil and gas companies.
A reduction in the rate of National Insurance or income tax are believed to be the leading options for tax cuts.
A HM Treasury spokesperson said: “The existing scheme providing a 95pc loan to value mortgage was introduced in April 2021, has so far enabled over 39,000 households to buy a home – over 86pc of which are first-time buyers.
“At the Autumn Statement the scheme was extended for a further two years to provide additional support for first-time buyers.”
