Ed Balls has warned that interest rates may have to rise if the government does not act to ease the current property "boom".
The Shadow Chancellor said: “Mark Carney is right to warn about the risks to our economy of a lop-sided housing market where housing demand hugely outstrips supply.
Mr Balls said the Governor's comments put the ball in George Osborne's court, adding that the Government should cut the Help to Buy limit to £600,000 and introduce an additional "Help to Build scheme".
“Unless the government acts the danger is that the Bank of England will be forced to raise interest rates prematurely.
The government's controversial Help to Buy scheme is "providing desperately needed homes", the association representing property builders has said.
Home Builders Federation Executive Chairman Stewart Baseley said: "The Help to Buy Equity Loan scheme has supported demand for new build homes and its extension provides certainty about longer-term demand.
Mr Baseley said the scheme is helping the industry "plan ahead, rebuild capacity lost in the downturn and deliver".
Nick Clegg has told ITV News Mark Carney should have the final say on whether the controversial Help to Buy scheme should be scaled back.
In comments that appear to contradict Chancellor George Osborne's defence of the programme, Mr Clegg said: "If Mark Carney - in view of his concerns about the housing market - thinks we should scale back on some of those schemes, that's exactly what we should do."
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.
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.
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.
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.
Governor of the Bank of England Mark Carney has warned that there is a "distinct possibility" that the Royal Bank of Scotland would have to move outside of Scotland in the event of a vote for independence.
Speaking to MPs on the Treasury select committee, Mr Carney said European laws require banks to have their head offices in the same member state as their registered offices. Asked if RBS would have to move to the remaining UK if voters backed independence, he said:
It's a distinct possibility but I shouldn't prejudge it.
It depends on their arrangements as well, if they were to adjust more into Scotland the minor management of the institution.
Bank of England governor Mark Carney will today face a grilling by MPs over claims that some of its officials knew about the alleged practice of foreign exchange rate-fixing.
Mr Carney is due to appear before the Treasury Select Committee just days after the Bank suspended an employee over compliance concerns following an internal probe.
Governor of the Bank of England Mark Carney will meet with the Treasury Select Committee to answer questions on the "economics of currency unions" amid debate over the possible implications of a Scottish vote for independence.
Chancellor George Osborne has already ruled out a currency union between an independent Scotland and the rest of the UK.
First Minister Alex Salmond's Scottish Government wants to create a "sterling zone" with the rest of the UK if there is a Yes vote in the break-away referendum.
Mr Carney said in a speech in January that an effective currency union would force a newly-independent Scotland to hand over some national sovereignty in a similar way to how this is done in the eurozone.
"Any arrangement to retain sterling in an independent Scotland would need to be negotiated between the Westminster and Scottish parliaments," he said. "The Bank of England would implement whatever monetary arrangements were put in place."
The Governor of the Bank of England has told ITV News the economic recovery remains too fragile to raise rates yet.
Mark Carney's comments come as the Bank today abandoned its flagship forward guidance policy linking interest rates to unemployment after just six months - but insisted they must remain low for longer to support the economy: