BUSINESS secretary Vince Cable and Barclays’ Anthony Jenkins mauled the Treasury’s Help to Buy scheme yesterday, adding to fears about the risk of a new housing bubble.
Cable said: “We should certainly think about how it should come into effect, indeed whether it should come into effect in the light of changing market conditions.”
London and the south east were mentioned as areas where price inflation was particularly concerning.
Jenkins, the group chief executive of Barclays, commented: “There is a risk of a property-driven boom in the UK. The regulators are on it and don’t intend that to happen, but these things are difficult to control.”
He added that Barclays would be avoiding high loan-to-value mortgages.
Next year, the full Help to Buy scheme begins, and mortgage guarantees become more widely available. Recent statistics showed house prices in London were up by 8.1 per cent in the year to June, while regular pay rosy by an anemic 1.1 per cent.
The first stage of Help to Buy enables buyers with just a five per cent deposit to buy a new-build property worth up to £600,000.
From January, the scheme will be extended to include a mortgage guarantee for buyers of any home up to the same value with deposits of between five and 20 per cent. It is due to last for three years.