The Bank of England has refuted the idea it is intending to change part of the Help to Buy scheme.
Robert Peston, the BBC’s business editor, claimed the Bank’s governor Mark Carney was considering lowering the maximum price of property from £600,000 to a figure nearer £350,000 or £400,000.
However, the Bank responded to Mr Peston’s claims by saying: “The assertion that the governor would like the Treasury to reduce the maximum size of loan that qualifies for a Help to Buy mortgage is completely without foundation.”
The Help to Buy mortgage guarantee scheme has come under criticism for increasing house prices in London and the south-east, when it was intended to help first-time buyers in other areas of the country. By lowering the maximum price, it would significantly reduce the number of houses in the capital and surrounding areas that are eligible for the government’s flagship housing policy.
Mr Peston stated lowering the property value from £600,000 would also enable interest rates to remain low – something he believes Mr Carney is keen to achieve if at all possible.