The Bank of England does not have the power to veto the Help to Buy mortgage scheme, according to its governor Mark Carney.
While feedback has generally been positive about the government-funded mortgage scheme, some fear it will cause house prices to increase sharply and spark a housing bubble.
Responding to a letter he had received from Andrew Tyrie, the chairman of the Treasury select committee of MPs, Mr Carney said: “The Financial Planning Committee (FPC) has no power to require [the Treasury] to vary the terms of, or close, the Help to Buy scheme.”
He also added that “issues related to home ownership are the responsibility of the government and parliament”.
However, the FPC is not completely detached from Help to Buy; it has been asked to judge the impact of the scheme each year. From September 2014, it will determine how the mortgage scheme has changed the overall financial stability of the country.
The scheme, designed to help aspirant first-time buyers onto the property ladder, started its second phase in October and offers 20 per cent equity loans.
