While the mortgage guarantee aspect of the Help to Buy scheme will be available across the UK when it is launched in January 2014, the already active equity loan element only applies to properties in England.

Following George Osborne’s Budget announcement, the Homes for Scotland trade body called on the Scottish government to formulate a shared equity scheme for Scottish properties and Deputy First Minister Nicola Sturgeon has now announced a £120m fund.

The new scheme will run for two years and is open to first-time buyers and existing home owners purchasing a new build property.

Sturgeon said that the Government hoped it the scheme would stimulate the construction industry and help buyers unable to move into a property of their own.

“People in Scotland who should rightly be able to afford a mortgage are still facing real challenges buying a home,” she said.

“We are well aware of the challenges that people face and want to continue to do all we can to help. The £120m funding announced today will not only help people to buy their first home, they will also help ‘second-steppers’ to be able to sell their home and to move to another property.

“But this is not only about helping people to buy houses. Our actions are also stimulating the economy. By supporting house buying and construction, we are creating new work for the sector and supporting jobs.

“This demonstrates that in these tough financial times the Scottish government will step in, both to help households and crucial sectors of our economy like house building.”

The Scottish Government said it is currently consulting with the industry to work out final plans for the scheme.

Last week the Council of Mortgage Lenders urged the Welsh Government to pursue a similar programme of its own after the controversial axe of its NewBuy scheme just weeks before the planned launch.