Osborne dismisses fears of new property bubble

Giving evidence to the Commons treasury committee, he said the Help to Buy plan announced in the Budget last week would help families who were being priced out of the property market because of the high deposits demanded by lenders.

However, he acknowledged there were difficulties in ensuring the scheme was not simply exploited by wealthy homeowners looking to buy a second property.

Critics of the Help to Buy plan have warned that the injection of £12 billion of taxpayer guarantees over the next three years would simply drive up house prices, fuelling a dangerous new property boom.

However, Mr Osborne said that evidence from the Council of Mortgage Lenders suggested that would not happen. “They don’t think in the current circumstances we are going to get a housing bubble,” he said.