The prime minister has denied that the Help to Buy scheme is fuelling a housing bubble.

After it was revealed that the number of offers made has doubled in the last month, David Cameron has defended the government’s flagship housing policy.

Responding to claims that the scheme was making house prices rise too quickly, the prime minister said: “Where we are today, house prices are still way below the peak they reached in 2007. Forecasters do not think they will get back to the level before the crash even in 2019. So there is no evidence of a problem.”

Mr Cameron dismissed claims that the scheme was London-centric, adding that house prices had risen by three per cent in areas outside the capital and the south-east.

Before Christmas, Vince Cable told the BBC that the scheme was creating a raging housing boom in London and the south-east, but not in other areas of the country.

The government-guaranteed scheme enables aspirant first-time buyers to realise their dream, according to the prime minister, with just a five per cent deposit on a house worth up to £600,000.