Chancellor George Osborne had previously allayed fears of the scheme causing a house price bubble by stating the Bank’s Financial Policy Committee (FPC) had the ability to make changes or stop the scheme altogether.
But Carney, writing in a letter to Treasury Select Committee chair Andrew Tyrie, said the central bank was restricted to an advisory role and any decisions on the scheme’s future would lie with the government.
“The FPC does not have a veto on the scheme,” Carney stated.
“The FPC has no power to require HMT to vary the terms of, or close, the Help to Buy scheme. The FPC only has the authority to make recommendations in connection with such matters. Second, the FPC is not constrained by the government’s timetable for any such advice; it could make recommendations at any time.
“Third, the FPC would consider the merits of any possible change to the parameters of Help to Buy in the context of its assessment of the risks to financial stability arising from the housing market and the use of the considerable range of other tools over which it has influence.”
Royal Bank of Scotland, NatWest, Halifax and HSBC are the brands currently offering Help to Buy 2 mortgages with lenders such as Santander, Aldermore and Virgin Money preparing to launch in the coming weeks.
