UPDATE 1-Britain's Help to Buy scheme could be scaled back -Deputy PM

Mon May 19, 2014 8:51am EDT

(Adds comments from Prime Minister's spokesman)

LONDON May 19 (Reuters) - Britain could scale back its Help to Buy mortgage guarantees if Bank of England Governor Mark Carney advises such a move, Deputy Prime Minister Nick Clegg said.

Economic recovery and record-low interest rates have helped British house prices jump about 10 percent in the 12 months to April. That has raised concern some buyers might be taking on too much debt.

Carney on Sunday gave his strongest warning to date about the risks of a housing bubble, saying the Bank of England was looking at new measures to control mortgage lending amid a shortage of home building.

"I think if he says that we need to pare back on some of the government schemes like Help to Buy, then I think we should do so," Clegg told the BBC on Sunday, when asked about Carney's comments.

Help to Buy helps people buy property with deposits as a low as 5 percent of the property price.

The government began the state mortgage-guarantee scheme last year. The pace of the upturn in the housing market now has led to calls for it to be scaled back.

Prime Minister David Cameron's spokesman said on Monday the government would consider any advice from the Bank of England on changing the scheme. He pointed out the BoE's Financial Policy Committee, which is tasked with ensuring financial stability, would review the scheme in early autumn.

"The Bank of England will look at this and the government will take into close account any views the bank expresses," he said.

Asked if the government might make changes to Help to Buy before the FPC report, the spokesman stressed the importance of the BoE's advice in the government decision-making process. (Reporting by Sarah Young and William James, editing by Guy Faulconbridge, Larry King)

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