Mark Carney, the governor of Bank of England may shut down the UK government’s Help to Buy mortgage scheme ahead of time.
According to industry analysts, the scheme, strongly sponsored by chancellor George Osborne may be at risk in the next 18 months as the housing market continues to boom.
Osborne is a strong supporter and sponsor of the scheme that supports house buyers with small deposits and wants it to last for three years.
The risk that the booming housing market may turn into a housing bubble may encourage the Bank of England to tweak or shut down the scheme, a prospect considered increasingly likely by analysts.
UBS said it expected Carney to call a halt to the scheme in the next 18 months.
Bill O’Neill from UBS, said: "I expected macroprudential policies to be a first line of reaction from the Financial Political Committee (FPC) – we will see moves on Help to Buy in time, as well as increased capital requirements against mortgages" and also added "But I do not expect interest rate rises this year".
Carney admitted in early December that the pace with which the housing market was picking up concerned him.
He said: "There is a history of things shifting in the UK, and of the housing market moving from stall speed to warp speed, and of underwriting standards slipping. We want to avoid that."
Carney’s Financial Prudential Committee can use a range of other macro-prudential tools in an effort to calm other parts of the market it also fears are overheating.
Data from the Bank of England on 8 December showed that access to mortgages is becoming easier and the data from Halifax on the same day detected that house prices shot up 7.5% in the year to December.
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