King, who leaves his role at the end of next month, said that there was a fear the government could be left supporting the mortgage market in the long-term and that the Help to Buy scheme should not be made permanent.
“I’m sure that there is no place in the long run for a scheme of this kind,” he said.
“This scheme is a little too close for comfort to a general scheme to guarantee mortgages.
“We had a very healthy mortgage market with competing lenders attracting borrowers before the crisis, and we need to get back to that healthy mortgage market.”
The mortgage guarantee component of the Help to Buy scheme will come into force in January 2014 and is set to run for three years, something King said must not be extended.
He warned that the UK could eventually end up in a similar position to the United States government if the Help to Buy scheme became permanent.
“We do not want what the United States have, which is a government-guaranteed mortgage market, and they are desperately trying to find a way out of that position.
“So, we mustn’t let this scheme turn into a permanent scheme. Now when is the right time to terminate it will depend on economic conditions at the time.”
Last month, Prime Minister David Cameron was forced to defend the under fire scheme over it potentially causing a new housing boom. Further criticism of the scheme has centred on the possibility it will subsidise second homes for some of the wealthiest people in society.