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27.09.13

Bank of England to review Help to Buy

The Bank of England will review the Help to Buy housing scheme every year, amid fears that it could fuel a property boom. 

The Financial Policy Committee (FPC) has been asked to review the scheme each year from next September, with the power to recommend a reduction in the £600,000 cap so fewer houses are affected, or suggest the Treasury raises the fees paid by lenders for the guarantees. 

Chancellor George Osborne asked the BoE for its support following concerns about the increase in house prices as a consequence of the scheme. 

The Treasury said in a statement: “Now that the FPC have set out their latest assessment of the housing market... we are setting out more detail on how its role will work. 

“The FPC's assessment this week – in line with that of the chancellor and the [Bank of England] governor – is that recent developments in the housing market represent a broadening recovery from low levels of activity, but that we must remain vigilant as that recovery progresses. 

“The chancellor has asked the FPC to work with him every September, starting next year, to assess the ongoing impact of the Help to Buy scheme. Following that annual assessment, he has proposed that the FPC advise him on whether the key parameters of the scheme – the price cap and the fees charged to lenders – remain appropriate.” 

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