Cable: Govt should reconsider H2B

Critics of the scheme, which allows people to buy homes worth up to £600,000 with a deposit of 5%, say it will cause an unsustainable housing bubble inflating prices so that home ownership will remain out of reach for many.

And Cable warned that London and the South East could be gripped by a "raging housing boom".

Cable also said that ratings agency Standard and Poor's is "expressing worries” about the impact of Help to Buy.

But Andrew Bailey, head of the Prudential Regulation Authority, said that the regulator would take action if it feels the housing market is overheating

Speaking to the Sunday Telegraph Bailey said "We are watching the housing market very carefully."

"We've laid out the tools that we can use. That is hugely important - that we have set out our desire to see robust mortgage underwriting standards will be part of the approach."

Bailey said that should force banks to hold more capital or ask for more stringent mortgage checks.

"The thing I stress is that we will use those tools," Mr Bailey said, adding that he does not think the housing market is in a bubble yet.

Last week Rightmove predicted that prices in England and Wales could climb at the fastest rate since 2006 next year.

The online property portal predicted that prices could rise by as much as 8% as supply issues continue to fuel price increases.