The chancellor, George Osborne, says the second stage of the Help to Buy scheme, aimed at enabling more people to buy properties, will be closed to second home buyers.

George Osborne has called housebuilders and mortgage lenders to a meeting to discuss the details.

The first phase of the scheme was launched four months ago and provides equity loans for buyers of new homes.

From January next year, it will be extended to help buyers of existing homes. It will allow people to buy with just a 5% deposit. The government will guarantee a proportion of the loan to give the banks greater confidence to lend.

Properties of up to £600,000 will come under the plans, although foreign buyers with no history of property owning in the UK, buyers of second homes and buy-to-let landlords will be excluded, Mr Osborne confirmed ahead of the meeting.

George Osborne: "It's not for second homes. They won't be allowed". He said a mechanism had been drawn up to prevent second home buyers from taking advantage.

The biggest lenders, including Lloyds, RBS, Barclays and Nationwide, are being called into Number 11 to be to told to get ready for the launch of the new scheme. With them will be representatives of the main housebuilding firms - many of whom say that a boost to the housing market will have the knock-on effect of spurring them on to build more homes.

The first stage of Help to Buy has been widely considered to have brought a lift in activity in the housing market. New figures from the British Bankers' Association show that the number of mortgage approvals for house purchases rose again in June.

The figure reached 37,278 in June, up from 36,290 a month earlier, and 33% higher than the same month a year earlier.

This is a relatively early stage of the house buying process, but figures from HM Revenue and Customs (HMRC) revealed a pick-up in actual sales. Transactions in the UK rose to 89,050 in May, the highest figure since November on a non-seasonally adjusted basis. In May 2012, there were 75,350 sales.