Osborne dismisses fears of house price bubble

Chancellor George Osborne played down concerns that house prices might rise too quickly because of government measures to help mortgage lending. Recent surveys suggest government support is stoking Britain's housing market, which in recent decades has been characterised by dramatic price surges followed by strong corrections. Prices nationally are rising at their fastest pace in three years and hot-spots have emerged in parts of London where property inflation is running well into double digits. Osborne dismisses fears of house price bubblesborne told a parliamentary panel the Help-to-Buy scheme was unlikely to be extended but would not be wound up before the three-year term was up. He said the scheme, which offers subsidies to riskier borrowers finding it hard to buy a house, was a targeted response to a malfunctioning mortgage market and dismissed concerns property prices had become a one-way bet. "I don't think in the current environment a house price bubble is going to emerge in 18 months or three years," he said. The International Monetary Fund, former Bank of England officials and some serving policymakers have been critical of the government's intervention. Osborne, facing tough questioning from the Treasury Committee, said the ideal scenario would be for property prices to rise in line with earnings but the scheme would not end prematurely even if prices rose faster. "You have to provide some kind of timeframe to mortgage companies and banks which are going to be investing in systems to deliver the scheme," he said.