Business secretary Vince Cable has said the Help to Buy mortgage scheme should not be introduced in January.
While the Liberal Democrat wants first-time buyers to have better access to the market, he now believes that the programme might cause a housing bubble.
There have been some concerns raised by opposition figures and activists that Help to Buy might arbitrarily raise the prices of properties across the UK – further pricing out younger people from purchasing a home.
Speaking on the BBC Radio Four Today programme, Mr Cable said: “We certainly do not want a housing bubble.”
Inflated property prices were one of the primary causes of the US’ sub-prime mortgage crisis, which was a contributory factor in the 2008 global recession.
Credit was given to consumers who would never have had a chance of repaying what they owed and the amount of debt piled up so high, financial institutions could not lend money to businesses – causing a worldwide knock on effect.
