The Help to Buy scheme could be creating more of a problem than solutions for the UK housing market.  That is the sentiment by several former Bank of England economists as the scheme aims to help, but could be creating a possible bubble in just a few years.  The scheme was originally put in place to help those who needed more lending power in regard to the deposit necessary for home ownership.  Fathom consulting, a leading think tank, suggests the scheme could be dangerous for the housing market in general by the year 2016.  The firm believes house prices could be inflated by as much as 20% by then.

Andrew Brigden, an economist with Fathom, commented on the scheme and pointed out a potential downside to the government program, saying: “Help to Buy uses public money to incentivise the banks to lend precisely to those individuals who, [without] the scheme, would not and should not be offered credit.”

Brigden added: “Had we been asked to design a policy that would guarantee maximum damage to the UK’s long-term growth prospects and its fragile credit rating, this would be it.”

The belief overall from Fathom is the scheme could end up hurting the very group of people that it initially set out to help – first time buyers.

There is another side to the argument which suggests the criteria will still be as rigid and lending will still be decided by an individual, not a set of financial reports.

A member of the Treasury responded to the opinions of the Fathom, saying: “All mortgages sold under Help to Buy will have to meet clear criteria that ensure responsible borrowing. Nobody wants to see a return to the bad old days of 125 per cent mortgages.

“The intention of Help to Buy is absolutely clear - it is for people who want to own their first home or move to a bigger home, not a second home. We're working with the industry on the details of the scheme to do just that.”