The Government’s Help to Buy scheme “went on too long” and we will “all be left paying the price”, a leading property association has warned.

Rising numbers of first-time buyers who purchased using the Help to Buy equity loan scheme are increasingly finding themselves struggling to make repayments.

Under the scheme, which closed in March, buyers could purchase a new-build home with a 5% deposit and a 20% government-backed equity loan, or 40pc for those in London.

This loan was interest-free for the first five years.

After that, interest is charged at 1.75pc – a rate that then increases by a measure linked to inflation.

But the surge in costs is starting to push first-time homeowners to breaking point.

Many are trying to downsize, a position most would never have predicted when taking their first step on the property ladder.

Commenting on the growing crisis which many homeowners are facing as a result, Jonathan Rolande of the National Association of Property Buyers, said:

“Homeowners who took advantage of Help to Buy loans are now being hit harder than most. Help to Buy stimulated growth and job creation not long after the financial crash of 2008 when the market was still very fragile.

“However, it resulted in a great transfer of wealth from the government and borrowers to property developers. Asking prices, builders’ profits and share prices rose quickly, creating some of the ingredients of today’s inflation, interest rate and house-price difficulty.

“The scheme was generous and it went on too long, artificially propping up the new-build sector. In the end it looks like we’ll all be paying the price.”

Outlining the wider problems across the sector, Rolande continued: “Just about everyone who has anything to do with property has been affected by the rise in interest rates and the fall in prices over the last 12 months, but new home owners more than most.

“This is because much like a new car, new homes invariably lose value once occupied. The fittings such as carpets and kitchen appliances aren’t new and often, as the developer looks to exit, discounts are applied to the last remaining properties that bring down the values on the whole development.”

But Rolande said he doesn’t feel the Government should intervene.

“No, interventions shouldn’t happen. This is no scandal as we have seen with, for example, cladding or mis-sold mortgages. Buyers were aware of the costs and the risks and in many cases, the properties are still worth more than was paid – the market has risen for four out of the last five years.

“If owners made money on the purchase, it would be a tax-free gain – in my opinion, the taxpayer shouldn’t have to step in to assist with the losses when it would see nothing of the gains.

“Mortgage holders will, like non Help2Buy owners, benefit from lender forbearance, instigated by the government. This should be the limit of state interference.”