The government has a new plan to reinflate the housing bubble. It's a complex scheme involving 95% mortgages, participation by the building industry and a public sector guarantee.
The problem with the scheme is that house prices are still too high. The Nationwide index of house prices to earnings (based on first time buyers) shows that currently house prices are 4.4 times earnings. The chart below is based on their data. I have fitted a trendline on the data from 1983 to 2003 (that is the two decades before the bubble). It shows that house prices fluctuated around 2.9 times earnings.
Lower prices would do more to help first time buyers. Building houses should help to stimulate growth in the economy and make housing more affordable.