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Government's mortgage scheme given lukewarm welcome

The taxpayer-backed Mortgage Guarantee scheme was announced in last week's budget. Photo: Press Association

The Chancellor's independent advisers, the Office for Budget Responsibility, have not exactly given his big, bold idea from the Budget a very warm welcome this morning.

Speaking to MPs, Steve Nickell and Robert Chote suggested that the idea to provide 130 billion of guarantees to people who want to buy homes up to £600,000 will stimulate house building 'a bit, but not much'.

They echoed warnings made to ITV News last week by the IFS among others, that there is a very real risk that helping many more buyers into the market will drive prices up.

The first half of the plan, the expansion of the shared equity scheme to £3.5 billion, gets under way next week. We will be watching closely to see what happens next.