Tyrie wants BOE to clarify its authority relating to ‘Help to Buy'

Andrew TyrieAndrew Tyrie, the chairman of the Treasury Committee has asked the Bank of England to clarify what powers it has to protect the UK from the property bubble.

Tyrie has written a letter to the Bank Governor Mark Carney asking for clarification on what role is the central bank going to play in monitoring the new phase of the Government's Help to Buy scheme. Leading banks have said that they will participate in the scheme in order to boost the housing market by allowing people to benefit from government backed mortgages.

The Bank of England has indicated that it is watching the UK's housing market carefully for signs of overheating as the prices of houses rise and mortgage lending increases in the country. The Help to Buy scheme backed by Chancellor George Osborne was launched in the previous month and the new phase, which is aimed at kick starting the market, will run until January 2017. The BOE had earlier said that the Financial Policy Committee will monitor Government's controversial Help to Buy mortgage scheme.

Under the scheme, taxpayer will be able to get insurance for up to 15 per cent of a mortgage on houses worth up to £600,000. The scheme will allow banks to offer mortgages upto 95 per cent with very little risk. Politicians in the UK have said that the government's schemes to help stabilise the housing market will not result in a housing market bubble.