This article was last updated on April 16, 2022
Prime Minister David Cameron has indicated willingness to “consider” lowering the cap on ‘Help To Buy’ mortgage guarantee scheme on Tuesday if recommended by the Bank of England (BoE).
The scheme allows people to buy a home valued at as much as 600,000 pounds ($1 million) with deposits as low as 5 per cent.
According to the recent figures by the Office for National Statistics, the U.K. house prices rose by 8% in the year to the end of March with the average house price reaching £452,000.
The central bank is currently searching for new measures to control mortgage lending amid a shortage of home building, as BoE Governor Mark Carney has warned during the weekend regarding the risks of a housing bubble that poses danger to a long-term financial stability.
Mr Cameron has responded to Mr Carney’s caution by saying: “It is absolutely right that we are alert to any dangers and problems. We’ve given to the BOE and the Financial Policy Committee the tools and responsibility to call out any bubbles in our economy and act on them.”
When asked if the government would consider changing the Help to Buy scheme to reduce its upper borrowing limit, the Prime Minister has agreed: “Of course. We will consider any changes that are proposed by Mark Carney.”
However, Labour’s shadow work and pensions minister Stephen Timms has told to be “concerned” by the government’s position on housing as he said: “We’ve had lots of examples of unsustainable booms presided over by Tory governments that have been destroyed by housing bubbles.
“My concern is that we could be heading in that direction again now.”
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