Lenders fear the forecast falls in house prices will quickly lead highly leveraged buyers into negative equity. Nationwide, for example, has increased the necessary size of a deposit from 5pc to 15pc.
This change disproportionately affects anyone who is trying to get onto the property ladder, and unless first-time buyers have serious cash reserves, they are effectively shut out of the market.
Under the Help to Buy scheme, which was set up in 2013, buyers can borrow an equity loan from the Government up to an additional 20pc of the property’s value (or up to 40pc in London), meaning they can buy with a mortgage that covers 75pc of the house price.
Alex Rose, of Zoopla, said some people may also be drawn in by developers offering additional perks. “Often there are incentives such as contributions towards legal fees, moving costs or entry level furniture packs that support buyers in their first property purchase,” he said.
First-time buyer demand for new-build homes is up 87pc since March, according to Zoopla.
The biggest jumps in demand are in the parts of the country where homes are cheaper. In London, where properties are most expensive, new-build demand is only up 38pc on the March benchmark.
The new-build sector has also had advantages over the resale sector during the lockdown period, added Mr Rose. Many developers were able to continue selling even while the market was suspended because they were already well-adapted to using virtual viewings, said Mr Rose.
This meant that it was possible to maintain a greater degree of activity. From March 8 to April 5, new-build demand only dropped by 53pc, compared to a drop in resale demand of 71pc.
The spike in demand will likely settle over the summer but will convert into agreed sales, added Mr Rose.
But the new homes sector has big vulnerabilities. It is incredibly reliant on Help to Buy, with more than 40pc of new homes in Britain sold using the scheme, according to the Home Builders Federation, a trade body.
It is due to end in its current form in March 2021, which means builders have a deadline to agree sales this year to transact properties under the current terms.
This is problematic considering construction on most major building projects stopped during lockdown and some developments are now delayed. Many in the industry have called for an extension.
A replacement scheme, which will include regional price caps and will only be available to first-time buyers is scheduled to run from April 2021 to March 2023. After then, there is no certainty what, if anything, will come next.