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Help to Buy could be 'pared back', Clegg says

The government housing scheme blamed by some for inflating house prices should be "pared back" if the Bank of England advises it, Deputy Prime Minister Nick Clegg has said.

In a BBC One interview, Mr Clegg said: "If [Bank of England Governor Mark Carney] says we should pare back on some government schemes like Help to Buy then I think we should do that.

"He's certainly right when he says the big problem is that we simply don't build enough homes in this country," the Lib Dem leader added.

House prices up 12% in last five years

A graph shows average annual price changes in the last five years. Credit: Land Registry

Property prices in England and Wales have increased by 12% since they bottomed out five years ago.

According to figures from the Land Registry, average the value of the average home stood at £169,124 in March this year.

That is up from £150,490 in April 2009 - the lowest point following the crash that began a year earlier.

Price increases have been quickening as the economic recovery has taken hold, with stronger demand leading to a surge in values.

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House market boom 'biggest risk' to economic recovery

Britain's booming housing market represents the "biggest risk" to the economic recovery, Bank of England Governor Mark Carney has warned.

With approvals for large mortgages on the increase, Mr Carney expressed concern about the dangers of another "big debt overhang" building up.

Governor of the Bank of England Mark Carney during a news conference this week. Credit: PA

In an interview with Sky News's Murnaghan, to be shown tomorrow, he said there was little they could do about the "deep, deep structural problems" in the housing market, with demand for homes outstripping supply.

Mr Carney surprised some analysts last week when he played down the prospects of an early rise in interest rates - despite the fears of a housing market bubble.

Interest rates 'likely to remain low for some time'

Interest rates are "likely to remain low for some time" but the UK has "edged closer" to a rise, Bank of England Governor Mark Carney told ITV News' Economics Editor Richard Edgar.

The Bank of England. Credit: PA

He added that "today is not the day" to rise interest rates and the exact timing of the first rise "will be a product of the evolution of the economy".

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Bank of England to announce economy forecasts today

The Bank of England is to deliver a latest forecast for the UK economy today, with any improvement could signal that interest rates may increase earlier than expected.

Experts have pencilled in a hike in the cost of borrowing from its historic low of 0.5% for the spring of next year.

Read: CBI predicts early rate rise amid house price warning

Surging house prices are unlikely to have any direct effect on interest rates for the time being as the Bank of England has said it would rather use other tools at its disposal to cool a potential property bubble before having to raise rates to do so.

Barratt warns BoE against limiting mortgage availability

The chief executive of Britain's largest house builder has urged the Bank of England not to restrict lending because it would hit "young people who are trying to get onto the housing ladder".

Mark Clare, chief executive of Barratt Developments, told ITV News he was concerned that limiting mortgage availability would force young people back into rented accommodation.

His comments came after interest rates were today kept at 0.5% despite growing calls for the Bank of England to act after housing prices jumped 9% in the last year.

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