Business Secretary Vince Cable has warned that the government's schemes to boost the property markets will lead to an increase in the property prices and may even lead to a property bubble.

The Liberal Democrat minister warned over a possible property bubble as the property prices rise rapidly in the country. Mr Cable is expected to show a more cautious assessment of the economy than Chancellor when he speaks to the business leader today. He will say that there are encouraging signs of recovery but it can only be sustained through investments by businesses that have remained lower than other countries.

While speaking at the Government/CBI industrial strategy conference at Warwick University, he warned against complacency generated by a few quarters of good economic data. Cable caused doubts over the new scheme saying that it might increase the price of houses in the country.

Under the scheme, people in the UK will be able to buy a home with a 5 per cent deposit and the UK Government will act as guarantor for a mortgage for an extra 20 per cent of the value of the property. The UK housing market is facing a difficult economic situation due to the slowdown in the economy as well as the on-going sovereign debt crisis in the Eurozone.