Taxpayers stand to lose hundreds of millions of pounds if house prices fall, thanks to a gamble the government has been making with our cash for the past three years.

Some £3.59billion has been lent to first-time buyers through the Help to Buy loan scheme to help them purchase newly-built properties they may not otherwise have been able to afford, according to the latest government statistics.

The scheme was launched by the former Chancellor George Osborne in 2013, in response to a stagnating housing market.

It effectively lets borrowers with small deposits top them up with a government loan, worth up to 20 per cent of the value of a new build property.

High stakes: The government has been putting our money on the line in a huge gamble on house prices

For the 81,014 buyers who have taken advantage of the scheme so far, it has been an invaluable lifeline, the difference between making that step on to the first hallowed rung of the property ladder and continuing to rent.

However, the side effect of the scheme leaves taxpayer funds extremely vulnerable to losses if house prices start to fall.

This is because the size of loans is not fixed, but rather is measured as a proportion of the value of the properties bought.

Take, for example a first-time buyer who uses the scheme to buy a home costing £300,000.

They could borrow up to 20 per cent of the value of the property - £60,000 – using Help to Buy, and put down just a five per cent deposit themselves.

However, the size of the loan remains 20 per cent of the value of the property – regardless of how it fluctuates.

So if the house increases in value by ten per cent to £330,000, the value of the loan will increase by ten per cent as well to £66,000. The taxpayer turns a profit.

But if the value of the home declines by ten per cent to £270,000, the value of the loan will decrease to £54,000. Taxpayers will just have to suck up the £6,000 shortfall.

A total of £3.59billion has been lent out so far. If the value of the homes they helped paid for drops by just ten per cent, the borrowers will be off the hook for as much as £359million – a cost that will be picked up by the taxpayer.

For sometime, this may have felt like a safe gamble. Prices have been rising year on year, and while they rise the taxpayer gets a piece of the action, through the Help to Buy loans.

Indeed the first loans issued in 2013 are likely to have been a good bet as house prices have continued to rise since.

But the decision to Brexit, increasingly expensive property and stagnant wage growth has raised questions about whether house prices will start to falter.

If they do, it is likely newly-built homes – those for which Help to Buy is intended – will suffer the most, as much like a new car they tend to lose value as they move from their first to second owner.

I have a friend who is thinking about buying her first home – and in a great job in finance with an ample salary, she’s in a great position to do it.

While she doesn’t need government support to buy, she’s worried that house prices could fall and so she’s considering using Help to Buy as a taxpayer-funded backstop against her potential loses.

Living in London, she could buy a home up to the value of £600,000 and borrow as much as £120,000 from the government.

Falling levels: Home ownership has dropped to its lowest level since 1986, as this graph shows

When a taxpayer-funded scheme offers a backstop against house prices falling to an affluent worker in finance, you know that things have gone a bit awry in our housing policy.

For years, there’s been a tweak here, another scheme there, until we have a system full of inconsistencies and riddles – and yet still levels of homeownership are in rapid decline.

Ministers this week called the housing crisis a ‘national emergency’ after a Resolution Foundation report found that levels have plunged to a 30-year low.

The problem is that people simply cannot afford the eye-watering cost of buying property any longer.

Looked at most simply, there are two ways of resolving this – make property more affordable (which building more homes should do) or keep throwing more money at people so they can afford to pay the mad prices.

It’s time for the government to realise strategy number two is not working.

However, due in part to policies such as Help to Buy, our whole economy is bound up with the strength of the property market, so unravelling becomes increasingly unthinkable.

For too long, the government has been giving new powers to the Bank of England to ensure the housing market doesn’t overheat, while simultaneously conjuring up schemes such as Help to Buy that essentially create loopholes.