From the BBC:
Chancellor George Osborne has asked the Bank of England to take a bigger role in ensuring his Help to Buy housing scheme fuels a property boom.
The Bank's Financial Policy Committee (FPC) will make annual reviews of the scheme, starting next September. The committee had been due to make an assessment of Help to Buy only after its first three years of operation.
But the recent patchy recovery in parts of the housing market has raised questions about whether the scheme is having a big enough impact.
Help to Buy was originally launched to help buyers of new properties. A second, potentially much bigger phase of the scheme is due to begin in January to assist vendors who wish to sell to buyers who are unable to afford a down payment on a home.
The scheme provides taxpayer insurance for up to 15% of a mortgage on houses worth up to £600,000, allowing banks to provide up to 95% mortgages at a reduced risk to themselves, but an increased risk to the taxpayer and the real economy.
The Bank of England's FPC will be able to modify parts of the scheme to keep prices on the boil.
It will be allowed to review the scheme and could increase the £600,000 cap, so more homes are affected.
Great torrents of foam
The FPC could also also make loans more attractive by recommending that the Treasury reduces the fees paid by lenders for the guarantees.
BBC business editor Robert Peston said the chancellor had responded to criticism that his Help to Buy scheme was not causing the housing market boom which he had promised.
Friday, 27 September 2013
From the BBC:
My latest blogpost: "Help to Buy: Osborne asks Bank of England to keep closer watch"Tweet this! Posted by Mark Wadsworth at 07:40