(Adds comments from Prime Minister's spokesman)
LONDON May 19 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
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
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
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)