UK
28/11/2013 06:28 GMT | Updated 28/11/2013 06:31 GMT

Mark Carney To Stop Mortgage Funding Scheme As House Prices Soar

Toby Melville/PA Wire
Bank of England Governor Mark Carney during the bank's quarterly inflation report news conference at the Bank of England in London.

Mark Carney has moved to cool the mortgage lending market by announcing the withdrawal of the Bank of England's flagship scheme to back banks lending.

Carney's withdrawal of the Funding for Lending scheme (FLS) from next January would end up making it harder for households to borrow against their homes and help combat fears of a housing bubble, sparked as house prices have soared 13.4% in the two years since October 2011.

The Bank said there was no immediate threat to the financial stability of the housing market, but "risks may grow if stronger activity is accompanied by further substantial and rapid increases in house prices".

Speaking at the Bank's Financial Stability Report conference, Carney said it “is no longer appropriate to have our foot on the accelerator” for the mortgage market and the FLS would be changed to back the flow of credit to small businesses.

The Bank governor's move comes as he admitted to having no "veto" on the government's Help to Buy scheme, which offers aspiring home-owners cheap, state-backed mortgages.

TV property expert Kirstie Allsopp told the Huffington Post UK she had "reservations" about the scheme and warned some parts would "put people at risk".