A NewBuy Guarantee scheme designed to help home buyers shut out of the housing market is to be launched on Monday.

The scheme is expected to help as many as 100,000 people buy a new-build home with a deposit of 5% or 10% rather than the 20% typically demanded by lenders.

The government initiative is part of a package of measures unveiled last year aimed at kick-starting the flagging housing market as well as boosting the construction industry.

It was initially intended to help the first-time buyer portion of the market which shrunk back to a three-year low last autumn but the Government has widened the scheme to include home movers.

NewBuy has been masterminded by the Home Builders Federation and the Council of Mortgage Lenders but it still remains unclear how many lenders are ready to offer products.

Lenders' support is vital to the success of the scheme and fears have also been raised that rising mortgage rates could put would-be buyers off the initiative.

Developers would contribute 3.5% of the purchase price while the Government guarantees 5.5%. The scheme is available on flats and houses up to a maximum value of £500,000 in England only.

Those behind the initiative believe lenders will see it as less risky as it is backed by an insurance scheme contributed to by the building industry and Government.

But one banking source said last week that some lenders will need more time to get to grips with the idea.

"It's not a scheme that's going to change the housing market," the source said.

"It's there to support housebuilders, not necessarily to support home buyers as a priority."

The source doubted that the scheme would help those with a poor credit history get on the property ladder as buyers would be subject to the same standard of checks as they are with mortgages generally.

The Financial Times reported last week that a dispute has emerged over the price banks are prepared to charge for a 95% loan-to-value mortgage. It suggested they are looking to charge 5% or more but housebuilders believe this may put people off the scheme.

The scheme is also viewed by some as complicated, operating through a Guernsey-based insurer owned by the Home Builders Federation.

However, a spokesman for the Council of Mortgage Lenders expressed a more positive view, saying: "We are anticipating a number of lenders are working on plans to support the scheme. There is lender support and interest in the scheme. This is part of a wider approach to stimulating demand in the economy and it is part of a growth package and a series of measures."

A Lloyds Banking Group spokeswoman said last week that it is planning some products and that more details would be announced soon.

Barratt Homes said 20,000 people have already registered with it for more information about the scheme.