Lenders warn that the Help to Buy schemes may be cut short or derailed due to it ‘short circuiting’ the housing market by inflating house prices unnaturally.

An industry survey by the Intermediary Mortgage Lenders Association (IMLA) has found that 46% of lenders expect the scheme, which allows for just 5% deposits by first time buyers, to end earlier than its predicted three year run time.

Furthermore, 69% are reported to feel the scheme will be derailed by the rising house prices.

The main issue with the scheme is that the demand is going up without driving up the rate of building.

Halifax reported a 2.4% rise in house prices in February, which could well force the chancellor to tweak the Help to Buy scheme.

“These findings [by the IMLA] throw the spotlight on crucial policy decisions that must be thought through to safeguard the recovery in mortgage lending and house building” said Peter Williams, the executive director of the IMLA.

“Whether or not the scheme runs its full course is less important than making sure we have a self-sustaining market in place going forward” he added.

Only time will tell what the future of the scheme will be.