A mortgage guarantee scheme to help people with small deposits get on the property ladder is set to be announced at next week's Budget.
The government will offer incentives to lenders, bringing back 95% mortgages which have "virtually disappeared" during the pandemic, the Treasury says.
Chancellor Rishi Sunak says he will use the Budget to level with people about the pandemic's impact on the economy.
Amid the crisis, government borrowing reached £271bn for the financial year.
That is £222bn more than a year ago and has pushed the national debt to £2.13 trillion.
Explaining the government's economic response to the pandemic, Mr Sunak told the Financial Times: "We went big, we went early, but there is more to come and there will be more to come in the Budget. But there is a challenge [in the public finances] and I want to level with people about the challenge."
He added: "I will do whatever it takes to protect the British people through this crisis and I remain committed to that."
Labour has criticised the government for a "stop, start" approach to support measures during the pandemic.
The chancellor is also expected to announce an £126m scheme for traineeships in England.
It will include a new "flexi-job" apprenticeship, enabling apprentices to work with different employers in one sector. With unemployment at its highest level for almost five years, Mr Sunak said this was "vital" support for getting people back into work.
The chancellor will unveil his Budget in a Commons speech on Wednesday
On the mortgage scheme Prime Minister Boris Johnson said he wanted "generation rent" to become "generation buy".
The coronavirus pandemic has meant there are now few low-deposit mortgages available, the Treasury said, with just eight on the market in January.
They are often seen as riskier by banks as they are more vulnerable to negative changes in property prices - meaning people hold more debt than their home is worth.
Under the scheme, which will launch across the UK in April, the government will offer to take on some of this risk.
It is not restricted to first-time buyers or new-build homes, but there will be a £600,000 limit.
Mortgage providers will only lend to those with a regular income, irrespective of any government incentive.
But young adults' finances, and their employment prospects, have been hit hard by this pandemic. It was the same in the financial crisis of a decade ago.
That is why jobs will be central to this Budget - both protecting them now and creating them in the future to aid an economic recovery.
While the chancellor may be able to borrow fairly cheaply now to pay for that support, the prospect of future tax rises to foot the bill will no doubt be addressed too.
Covid has led everyone to face the realities of home, work, and working from home. On Wednesday, many will be looking to Mr Sunak to save their jobs and keep a roof over their heads - whether they own it, or not.
It is based on the Help to Buy mortgage guarantee scheme, which was introduced under David Cameron's government in 2013 and closed to new loans at the end of 2016.
The Treasury said that policy "reinvigorated the market for high loan-to-value lending after the 2008 financial crisis" and enabled 100,000 households to buy a property across the UK.
Of these, 80% were purchases by first-time buyers, statistics showed. But housing charity Shelter said the scheme increased house prices by 1.4%.
The Help to Buy mortgage guarantee scheme was distinct from the Help to Buy equity loan scheme that still allows first-time buyers in England to take out a government loan to put towards the cost of buying a newly-built home.
The new scheme could coincide with the end of a stamp duty holiday in England and Northern Ireland, which is due to end on 31 March, though this may yet be extended.
'Too early'
Mr Sunak also has to decide whether to raise taxes in light of pandemic spending.
In the run-up to the 2019 election, the Conservatives promised not to increase income tax, National Insurance Contributions or VAT - but the chancellor could argue circumstances have changed.
Carlisle MP John Stevenson, a member of the Conservative Northern Research Group, said it was "too early" for tax rises, saying the country had "still got a few months to go" of the pandemic so he wanted to see continuing support.
But former Conservative chancellor Lord Clarke said he expected taxes to be raised in the Budget.
He said the spending to stop the economy collapsing meant debt was piling up and "if we don't get it under control before inflation comes back then we will face a financial crisis".
Lord Clarke said the pandemic had been "unfair financially" on "the poor, the young, the low-paid, the vulnerable" and suggested making people who continue in full-time work after the age of 65 pay the same taxes as younger people.
Shadow chancellor Anneliese Dodds told the Times the Conservatives' approach to furlough and other economic support measures showed "a failure of confidence" and had "led to greater negative economic impact", resulting in job losses.
Next week's announcement is also expected to include a new £100m taskforce to crack down on fraudsters who have exploited support schemes, such as furlough.
Tax officials have opened about 10,000 inquiries into suspected fraudulent activity, the government said.
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2021-02-27 08:46:49Z
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