The chief executive of Lloyds Bank has warned that the Government's Help to Buy mortgage scheme could create a housing bubble unless systematic action is taken.
In an interview with the Financial Times António Horta-Osório said that the Government needed to free up planning restrictions in order to improve the flow of new house, or else risk inflating a property price bubble.
The Help to Buy scheme, which Lloyds helps to underwrite, allows buyers as little as a 5% deposit on a home, with the taxpayer guaranteeing 15%. The second-phase was moved forward and launched last week.
Critics of the scheme claim it will artificially increase house prices to unsustainable levels. Last month Nationwide said house prices were rising across every region of the UK for the first time since the credit crisis began in 2007 and prices in London have risen as much as 10%.
