Economist: Loan guarantee 'could push house prices up'

Paul Johnson, director of the Institute for Fiscal Studies, said there is a risk that the Government's Help to Buy scheme, designed to make houses more affordable, could have the opposite effect.

Speaking to Economics Editor Richard Edgar, he said: "There is a risk that a lot of this will do more to push prices up rather than making things more affordable."

He added that the policy is a "distributional" one as it helps those without large deposits get on the housing ladder, but in some cases "that's a bigger risk".

Could the Guarantee make mortgages more expensive?

Help to Buy: What the Budget means for house buyers and mortgages


Budget homes plan loophole

The Treasury has still not explicitly said it will prevent homeowners from using Government-backed mortgage guarantees to buy second homes, after ITV News exposed the loophole. It is also feared the cost of the scheme could be passed onto borrowers.