Government housing scheme Help to Buy has led to 4,000 new-build home reservations in its first two months.
According to the Home Builders Federation (HBF), there are now around 500 people a week taking advantage of the Help to Buy scheme, launched in April.
The government scheme is divided into two parts: the equity loan, which was introduced in April., giving those with a 5% deposit a 20% equity loan to buy a new-build home worth £600,000. The second part of the scheme is the mortgage guarantee, giving buyers with a 5% deposit a mortgage guarantee on any home, newly built or older, worth up to £600,000.
Stewart Baseley, executive chairman at the HBF, said: "The equity loan part of Help to Buy has got off to a flying start. It has been an unqualified success so far and 4,000 reservations in just two months both the consumer demand for the scheme and developer' commitment to it."
The scheme has received some criticism, with critics claiming that government guaranteeing home loans could potentially lead to another housing bubble.
Henry Pyror, independent buying agent and property expert, said: "The government's ill-conceived Help to Buy initiative is already inflating the next housing bubble. While laudable in intention, the policy – and in particular the mortgage indemnity guarantee element die to start in January – is interfering in an otherwise open market."
But Kate Faulkner, managing director of Designs on Property, defended the scheme, stating: "Help to Buy solves the catch-22 of lenders not being able to lend enough mortgages at 90% to 95% loan to value (LTV) and does so while property prices are still a lot lower than they were in most areas at the height of 2007.
"If first-timers have to wait for the property and lending market to recover, then prices could move out of their reach within a matter of years."
The HBF's Baseley added: "The large deposits required in recent years to secure a mortgage have prevented many from buying – and as a result, builders from building. The equity loan scheme helps consumers overcome that deposit barrier and as a result the scheme will undoubtedly lead to an increase in house building."
Other developers welcomed the news, with the chief executives of Persimmon, Barratt Developments and Taylor Wimpey all claiming the figures show that Help to Buy will play an important role in boosting the number of new homes being built.
According to the HBF, house building levels in England of 115,000 a year are currently around half those needed, with just 88,000 private homes built for sale last year. Since 2007 output has dipped to levels not seen since the 1920s.