The Adam Smith Institute, a libertarian think tank in favour of a free market economy, has criticised the government’s Help to Buy scheme.

Officials at the political consultancy body argue that the price of housing in the UK is currently substantially above historical averages and this means that demand-side intervention will worsen the problem.

Help to Buy mortgages offer consumers looking to purchase a house worth less than £600,000 20 per cent of a 75 per cent mortgage . This makes getting onto the property ladder significantly easier, with only a five per cent deposit needed.

But the Adam Smith Institute argues that the programme socialises the costs of what is meant to be a private transaction and gets the taxpayer needlessly involved in people’s business.

In a statement released to the press, the think tank said: “Mortgage subsidies promise more debt, more taxes and unnecessarily socialised risk. Radical liberalisation, on the other hand, presents the possibility of making an immediate and significant impact.”