Liberal Democrat business secretary Vince Cable has warned his Conservative partners’ Help to Buy policy could create a new housing bubble.
In the latest of a series of spats between the two coalition parties, Mr Cable spoke to Jeremy Vine on the BBC Andrew Marr Show and said he was worried the mortgage scheme could create excessive demand, which would raise prices substantially and put the finances of hundreds of thousands at risk.
However, the Treasury’s infrastructure minister Lord Deighton told BBC Radio 5: “Given the current situation with the economy I think we’re a long, long way from having any bubble.”
The first phase of the scheme was launched this year and only affects new build properties, but from next year any home will be able to have access to the 20 per cent loan .
Buyers of properties costing up to ï¿½600,000 will be eligible and there are no means tests related to it.
However, foreign buyers with no history of property ownership, buy-to-let landlords and buyers of second homes will all not be allowed to use Help to Buy, according to chancellor George Osborne.