Deputy prime minister Nick Clegg has said that the Help to Buy scheme will be “stopped” early, if it seems as though the initiative is not working.

Over 180,000 people could be set to benefit from the second phase of the plan, which was launched yesterday (October 8th).

In theory, potential homeowners will be given better interest rates on their mortgage and be able to secure deals via a five per cent deposit for properties valued at £600,000 and under – with the government guaranteeing a further 15 per cent.

However, Mr Clegg warned at an event in East London yesterday that the Bank of England needed to be “vigilant” to make sure that Help to Buy did not result in “inappropriate stimulation to the housing market”.

He also added that he believed the scheme was not to blame for a recent rise in property prices in London.

Royal Bank of Scotland and Lloyds Banking Group are currently the only banks to offer the mortgages, while Halifax is expected to follow suit next week. Aldermore and Virgin Money will also be included from January.