The government’s Help to Buy scheme is facing the axe amid concerns it is helping wealthier households and pushing up house prices.

The Telegraph understands that ministers are planning a “fundamental review” of the policy that could see it replaced with a scheme that is “more targeted on those it is meant to be helping.”

New research published last week showed that one in five households on Help to Buy have used it to upgrade their homes rather than to get onto the housing ladder.

The disclosure comes as the government faces pressure from developers and mortgage lenders to set out plans to finance the policy beyond 2021, when the current tranche of funding ends.

Almost 20,000 homebuyers bought new-build properties worth a total of £4bn assisted in the first year of the government’s Help to Buy scheme, figures showed on Wednesday, as the latest Land Registry data showed a dip in house prices in March.

In the first 12 months of the scheme, 19,394 properties were bought with an interest-free loan from the government, of which 87.5% were first-time buyers. The median loan was £36,999 and the median price paid for a property was £184,995.

The loans are available on properties costing up to £600,000, and the department for communities and local government said 163 properties costing between £500,001 and the limit had been bought using Help to Buy funding.

A further 1,056 costing more than £350,000 have been bought, but the largest group of sales is in the £150,001 to £200,000 bracket, where 6,196 purchases involved equity loans.

There is no limit on income to qualify for the Help to Buy scheme and, while 82% of buyers had a household income of £60,000 or less, 583 had household earnings in excess of £100,000.

The government has failed to demonstrate whether its £3.7bn Help To Buy equity loan mortgage scheme is giving value for money, the spending watchdog has warned.

The scheme was launched in England last April with the aim of helping credit-worthy buyers with a deposit of at least 5% on to the property ladder as well as increasing the housing supply by being targeted at new-build properties only.

But the National Audit Office (NAO) found there was no method in place to measure the “joined up” impact of a string of recent government initiatives aiming to inject new life into the housing market.

Margaret Hodge, chairwoman of the Commons public cccounts committee, said she was “shocked” the government was spending billions on the scheme without fully understanding its effects.

The NAO also found that in around one in 62 (1.6%) sales completed under the equity loan scheme last year the home buyer had a deposit of less than 5% and in one case the buyer had nothing at all, potentially increasing the taxpayer’s exposure if the property was later repossessed.

Amyas Morse, head of the NAO, said Help To Buy was generally “running smoothly” but warned: “The scheme’s costs, which come in large part from tying up £3.7bn long-term in the housing market, will be substantial.”