Money Help to Buy scheme Lenders brace for stampede as over 600,000 homes eligible for Help to Buy

High street bank Santander claims that up to 1.7 million people are planning to use the scheme. Photograph: Rebekah Downes/PA

More than 600,000 homes on the market are eligible for inclusion in the £12bn second phase of the Help to Buy scheme, according to the latest in a series of surveys leading to predictions that lenders will be flooded by pent-up demand for the government-backed mortgages.

Details of the 95% mortgages, which are available to existing homeowners as well as first-time buyers, are to be unveiled by the chancellor , with some banks expected to invite loan applications within hours of the Tuesday announcement. The second phase of the flagship scheme to give more first-time buyers and others wider access to thehousing market was brought forward by three months, with a report from high street bank Santander claiming that up to 1.7 million people are planning to use the scheme.

"It is going to accelerate more people going into the market, so the number of mortgage applications will increase and that will put more pressure on lenders and their [loan] processing," said David Hollingsworth of broker London & Country Mortgages. "But in terms of gross [mortgage] lending we are about less than half where we were in 2007."

Another mortgage broker predicted a surge in demand, stoked by media coverage of the scheme, that could be blunted by stringent eligibility checks from lenders. "A lot of people want to get on the property ladder and the lenders who come out with these products will be inundated with inquiries," said Andrew Montlake of Coreco. "But lenders are not going to suddenly forget about being prudent, so people are going to have to qualify for the loans."

Under this part of the Help to Buy scheme, buyers will need a minimum deposit of 5%, equivalent to about £10,000 for eligible homes in most regions of England and Wales. The government guarantees the next 15% of the property's value. The scheme is designed to encouragebanks and building societies to offer more, and cheaper, mortgages, to people who can only manage relatively small deposits to secure a property.