Prime Minister David Cameron has denied that the Government’s Help to Buy scheme is fuelling another house price bubble.
Cameron defended the scheme as new figures were published showing how many people have benefited from Help To Buy.
To date more than 6,000 people have put in offers on a home and applied for a mortgage using the Help to Buy mortgage guarantee scheme which began three months ago.
The mortgages, once approved, will represent nearly £1 billion of new lending to aspiring home owners who may have previously found the property market out-of-reach because of the size of deposit required.
Labour and coalition ministers have expressed concerns that the scheme may be causing house prices to rise, but Cameron claimed that in many parts of the country prices were "barely moving at all".
“The New Year is often a time when people look to make those big life-changing decisions like moving home or taking that first step on the housing ladder,” said Cameron, “But too many people have found themselves frozen out of the market in recent years as a result of the size of the deposit required. That is why as part of our long-term economic plan we introduced the Help to Buy scheme, so hardworking people with sufficient earnings can get on, fulfil their aspirations and enjoy the security of owning their own home.”
The Prime Minister rejected concerns that high demand was already overheating the market. "Where we are today, house prices are still way below the peak they reached in 2007," he said. "Forecasters do not think they will get back to the level before the crash even in 2019. So there is no evidence of a problem.”
Barclays and Santander are both preparing to sell mortgages under the Help to Buy scheme this month, joining Lloyds, Royal Bank of Scotland and HSBC.