The chancellor wants the scheme, which supports house buyers with small deposits, to last for three years.
But if the housing market overheats the Bank of England can recommend it is tweaked or is closed down early – something analysts believe is increasingly likely.
Carney’s Financial Policy Committee (FPC) can use a range of other macroprudential tools in an effort to calm other parts of the market it also fears are overheating.
Swiss bank UBS expects Carney to call on Osborne to scrap the scheme within the next 18 months, as well as using other tools.
“I expect macroprudential policies to be a first line of reaction from the FPC – we will see moves on Help to Buy in time, as well as increased capital requirements against mortgages,” said UBS’ Bill O’Neill. “But I do not expect interest rate rises this year,” he said, predicting a hike in mid-2015, once the other tools have been used.
It came as Bank of England data showed access to mortgages becoming easier. And data from Halifax yesterday showed house prices shot up 7.5 per cent in the year to December.
Carney has previously said he will remain vigilant on the housing market, and is introducing a new tool to vary the criteria borrowers must meet when applying for loans.
“Personally I would scrap it immediately – the scheme might help first time buyers today, but it will push up prices making it harder for first time buyers in five years’ time,” said Berenberg Bank’s Robert Wood.
“However, it is politically difficult for the Bank of England to do that when it reviews the scheme in September. It is more likely that the Financial Policy Committee will recommend cutting the maximum house price allowed under the scheme from £600,000.”