The arguments this week centre strongly on London, and the house prices there. It is claimed by Lloyds bank that the house prices in London are now 30% over what they were in 2007. The high demand, fuelled by cheap deposits on the Help to Buy Equity Loan and the Mortgage Guarantee is driving the prices ever higher, and this is what is causing the issue.

Lloyds announced last week that they will be pulling back on the Help to Buy schemes by announcing it would not approve a mortgage over £500,000 when their potential customers want to borrow over 4 times their annual salary.

However, George Osborne, as ever stubborn, is resisting whatever evidence there is to say that Help to Buy is causing the much feared housing bubble. Danny Alexander, the Lib Dem chief secretary at the treasury, said that it would be a mistake to let this housing bubble “disrupt the recover for homebuilding and construction industries. It would be a tragic mistake to allow the tail of London to wag the dog of the housing market in the rest of the country.”

The focus on London comes from the much higher house prices in and around the capital. It is thought that the already higher prices are having a huge effect on the housing market in general as a result of Help to Buy being used in the area, and fuelling the potential housing bubble. However, promoters of the scheme claim that the relatively small amount of homes purchased in London that were bought with Help to Buy (13% of all properties bought) is too small compared to the rest of the country to be making a difference.

The success or cessation of the scheme, as always, depends on the opinions of the large political powers in the country, and whether they will ever reach an agreement.