Research published by the Intermediary Mortgage Lenders’ Association (IMLA) reveals that 60% of lenders and 59% of brokers identify a potential house price bubble as the single factor most likely to undermine the government’s latest housing scheme.

IMLA’s Intermediary Lending Outlook shows that, while lenders anticipate a 2.7% increase in average UK property prices by the end of this year, if current market performance (aided by Help to Buy) is sustained, that figure could rise to 11% by the end of 2016, when Help to Buy is due to be removed.

That would leave the average house price at £180,265 by the end of 2016, close to the November 2007 peak £181,975 (Land Registry figures).The second, indemnity, part of the Help to Buy scheme, due to be introduced in January 2014, could push that figure even higher.

Peter Williams, executive director of IMLA, commented:

“Pleasing though it is to see increasing levels of activity in the market and a swell of consumer interest, these findings spell out the importance of keeping control over any future growth.

“There is a clear consensus that first-time buyers stand to benefit most from the second part of Help to Buy. But if house prices continue to rise for the duration of the scheme, then in essence we will be giving with one hand and taking away with the other. Moreover the exit from the scheme will need to be managed very carefully so it without causing serious harm to the market.

“If people are struggling to raise deposits in the current climate then a further 11% increase in house prices will lift the property ladder even further out of reach for some. House builders are attempting to bridge the ever growing chasm between supply and demand which is going to be essential to ensure we help more people to access the property ladder without creating new hurdles in the form of inflated house prices.”

However, Mark Carney, the governor of the Bank of England, promised in a speech today that the Bank would act to prevent  a house price bubble.

He said: “The important thing to recognise is that we now have tools other than interest rates that can be used to contain risks in the property and financial sectors. These so-called macroprudential tools were not available to us before the crisis and we are now fully prepared to deploy them if that were needed.

“The Bank of England is now in a position, for example, to supervise lending to specific sectors more intensively, to make recommendations to banks and building societies to restrict the terms on which new credit is provided, or even to raise capital requirements on mortgage or other types of lending.

“Having these in our toolkit – and if necessary using them – will help us to keep interest rates low to secure recovery without creating risks that make that recovery ultimately unsustainable.”

He added such intervention was the last line of defence but there was a lot the central bank could do: “I’m not saying we can do everything but there’s a lot we can do and it’s our responsibility to do it if necessary.”