Shadow chancellor Ed Balls has said the government’s Help to Buy scheme will make it harder for first-time buyers to get onto the property ladder.

In a speech at the Labour party conference in Brighton, Mr Balls called on the coalition to take immediate steps to improve the country’s housing stock.

The politician also said despite housing supply falling to its lowest level since 1920, there were very few properties being constructed and this could have a number of negative effects on the economy if the situation is not rectified.

“George [Osborne – the Conservative chancellor], it’s basic economics. If you push up housing demand, but don’t act to boost housing supply, all that happens is that you push house prices up and up,” Mr Balls argued.

However, it is unlikely any potential future Labour government would revoke Help to Buy, which has proven hugely popular among some first-time buyers looking to get an interest-free loan worth 20 per cent of their target property’s value.

Labour also used its conference to agree with proposals made by the International Monetary Fund to build around 400,000 new homes before 2015.