Weston, speaking at a Barclays panel debate in central London, was asked about the impact of Help to Buy on the mortgage market and whether this would lead to lending at 100% LTV or higher.
While he was broadly positive about the government scheme he warned against lenders going further.
“We learned some things in the financial crisis and that was 100%+ LTV mortgages do cause train wrecks so we shouldn’t lose that memory very quickly,” Weston said.
Recent industry speculation had suggested the government faces a big decision over how to withdraw the Help to Buy mortgage guarantee scheme but Weston said the private sector would help lenders make a transition.
“I think it will be an easier exit than the shared equity. There are people today who provide mortgage guarantee insurance and in Australia and Canada it has been used very successfully. There’s no reason it couldn’t be used more holistically here in the UK, and I expect it will.”
Housing minister Kris Hopkins was also on the panel and was quizzed about the impact of the scheme on house prices. He said it represented a small number of transactions.
“One of the reasons they [house prices] have gone up is because the market has reactivated itself. In March/April last year I was talking to estate agents and people in my town and people were interested in buying houses again.
“There’s a lag in the supply against the increased housing demand. That’s what affected house prices. Whether we catch up or not is the challenge, but actually we’re doing everything we can to do that.”
He said 15,000 houses had been built as a direct consequence of the Help to Buy equity loan scheme and added people needed to look at the situation across the country.
“There are significant hotspots in London at this moment in time but I’m housing minister for England and there are more people out there than those who live in London.
“It’s about representing those as well as putting interventions in place to make sure supply is met. Over the course of Help to Buy we anticipate something like 3.4m transactions of which 2% will be Help to Buy.”
Hopkins said 89% of equity loan mortgages taken out so far had been by first-time buyers and later said there was an ‘interesting Budget coming up’ on March 19.
