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The thatcherite Help-to-Buy scheme will explode into another housing crisis if "soaring" demand is not matched by building, surveyors told the government yesterday.
Home sales are at their highest in over five years, according to monthly research by the the Royal Institution of Chartered Surveyors (RICS).
But its members also reported the sharpest increase in house prices since June 2002 - sparking fears over a new housing bubble.
Help to Buy's first phase offered a 15 per cent mortgage guarantee on new-build homes when it was launched in April.
That was extended to existing housing stock last month and over 2,000 people have since taken advantage.
Some were used as props at a Downing Street press conference yesterday as David Cameron hailed the scheme's success. He boasted: "This is all about helping hardworking people get on the first rung of the property ladder - and helping them get on in life."
But RICS chief economist Simon Rubinsohn called for the government to "urgently" address the imbalance between supply and demand.
"Housebuilding starts have picked up recently but we are still well behind in terms of the amount of properties needed," he reminded Mr Cameron.
Part-nationalised banks RBS and Lloyds, along with HSBC, have signed up to offer 95 per cent mortgages as a result of the scheme.
The Left Economics Advisory Panel pointed out that it was a huge gamble to increase personal debt when wages are stagnant and jobs are at risk.
Co-ordinator Andrew Fisher said: "If the dangers of rising house prices, greater borrowing and suppressed incomes sound familiar, then that is because it was this combination that in large part contributed to the 2008 crash.
"Unless accompanied by a massive programme of housebuilding, Help to Buy will continue inflate house prices - making home ownership even more unaffordable for most families - and lead to another crash."
Mr Fisher added that the scheme could land taxpayers with huge liabilities if people default on loans as a result of austerity.
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