A future Labour government aims to build 125,000 new homes over the next five years by channelling up to £5bn from a new ISA for first-time buyers, Ed Miliband will announce.

The Labour leader would pressure banks to put money into a new "future homes investment fund", with the money coming from savings they hold under the Help to Buy ISA scheme Chancellor George Osborne announced in last month's Budget.

The chancellor used his last budget of the parliament to give first-time buyers a top-up of up to £50 for every £200 they save for a deposit.

Housing is a key election issue and the three main parties have pledged build more homes, and make home ownership more achievable for first time buyers.

The Conservatives have promised to build 200,000 homes for first-time buyers in England by 2020 if they win the election. The Lib Dems have pledged to help first-time buyers get on the property ladder through a rent-to-own scheme.

"We'll get Britain building again. Our plan is the first real plan for house building in a generation," Miliband will say at a rally in Warrington.

Home ownership has fallen to its lowest level in 30 years with a corresponding increase in homes for rent, according to the Financial Times.

At the same time, housebuilding is near record lows despite numerous attempts by the coalition to encourage more construction.

The chancellor dismissed the policy as being "badly thought through".

He said in a statement: "The Help to Buy ISA will support over a million first-time buyers achieve their dream of earning their own home – and with one badly thought-through policy, Ed Miliband would put all that at risk. It would undermine home ‎ownership and harm savers."