The government's multi-billion pound home loans scheme is not pushing up property prices, the Bank of England insisted today. Governor Mark Carney said Help to Buy does not pose a risk to financial stability and has not driven up house values by increasing demand. It is a major boost for Chancellor George Osborne, who has faced calls to rein in the mortgage guarantee scheme to only cover homes worth less than £260,000. Scroll down for video . Chancellor George Osborne has faced calls to limit the Help to Buy Scheme to much cheaper homes, but has been backed by the Bank of England . Under the £3.5billion equity loan scheme, introduced in April last year, first-time buyers and home movers can get help to buy a property worth up to £600,000. More than 35,000 homes have been bought using it so far, amid claims Britain is not building enough houses to cope with rising demand. In August, the head of the OECD global economic think tank called for the price limit to be more than halved to prevent a new property price bubble. But now Mr Carney has written to the Chancellor to say the £600,000 house price cap, and the fee charged to lenders who use it, 'remain appropriate'. He added the Help to Buy 'does not pose material risks to financial stability'. The intervention comes after first annual review by the Bank's Financial Policy Committee (FPC) of the scheme. Bank of England governor Mark Carney  has written to the Chancellor to say the £600,000 house price cap, and the fee charged to lenders who use it, 'remain appropriate' Latest figures from the Natonwide building society showed that house prices actually fell by 0.2 per cent last month, in the latest sign that the property market is cooling. However, prices are still dramatically higher than a year ago, ranging from 21 per cent in London to 4.3 per cent in the north of England. Mr Carney said that while there had been steep house price growth, Help to Buy 'does not appear to have been a material driver of that growth', with weak take-up in London where rises have been strongest. On Help to Buy, Mr Carney said the scheme had seen a return of lenders to the high loan-to-value market - representing mortgages of 90 per cent or more of a property's value. But the level of these remained relatively small compared with before the financial crisis, accounting for 9 per cent of mortgages in the year to date compared with 25 per cent in 2007. 'Looking ahead, and based on uptake of the scheme so far, we expect the volume of HTB loans to grow, but to become only a modest proportion of lenders' mortgage books over the life of the scheme.' In response Mr Osborne said: 'I was pleased to see the committee's conclusions that the scheme does not pose material risks to financial stability in the UK and has not been a material driver of recent house price growth.' The average house in the UK costs to £188,374, edging down from the all-time peak of £189,306 recorded in August, according to latest figures from Nationwide . The Bank's request for new powers to rein in risky home loans comes after Mr Osborne offered them earlier this year - beefing up its current ability to offer recommendations for controls on the market. It said the availability of powers of direction rather than just recommendation could allow it to skirt the need for time-consuming consultation 'where urgent implementation is required'. 'This can be an important consideration in a market like housing, where quick implementation may be necessary to prevent lenders and borrowers bringing forward transactions in anticipation of policy changes, putting more pressure on the market.' The Bank is asking for powers of direction over LTV ratios as well as debt-to-income (DTI) ratios.
Mark Carney said Help to Buy does not pose a risk to financial stability .
State-backed mortgages offered on properties worth up to £600,000 .
OECD called for limit to be lowered to £260,000 to prevent boom .
But Bank insists it is 'appropriate' and not fuelling a property bubble .
The government's multi-billion pound home loans scheme is not pushing up property prices, the Bank of England insisted today. Governor Mark Carney said Help to Buy does not pose a risk to financial stability and has not driven up house values by increasing demand. It is a major boost for Chancellor George Osborne, who has faced calls to rein in the mortgage guarantee scheme to only cover homes worth less than £260,000. Scroll down for video . Chancellor George Osborne has faced calls to limit the Help to Buy Scheme to much cheaper homes, but has been backed by the Bank of England . Under the £3.5billion equity loan scheme, introduced in April last year, first-time buyers and home movers can get help to buy a property worth up to £600,000. More than 35,000 homes have been bought using it so far, amid claims Britain is not building enough houses to cope with rising demand. In August, the head of the OECD global economic think tank called for the price limit to be more than halved to prevent a new property price bubble. But now Mr Carney has written to the Chancellor to say the £600,000 house price cap, and the fee charged to lenders who use it, 'remain appropriate'. He added the Help to Buy 'does not pose material risks to financial stability'. The intervention comes after first annual review by the Bank's Financial Policy Committee (FPC) of the scheme. Bank of England governor Mark Carney  has written to the Chancellor to say the £600,000 house price cap, and the fee charged to lenders who use it, 'remain appropriate' Latest figures from the Natonwide building society showed that house prices actually fell by 0.2 per cent last month, in the latest sign that the property market is cooling. However, prices are still dramatically higher than a year ago, ranging from 21 per cent in London to 4.3 per cent in the north of England. Mr Carney said that while there had been steep house price growth, Help to Buy 'does not appear to have been a material driver of that growth', with weak take-up in London where rises have been strongest. On Help to Buy, Mr Carney said the scheme had seen a return of lenders to the high loan-to-value market - representing mortgages of 90 per cent or more of a property's value. But the level of these remained relatively small compared with before the financial crisis, accounting for 9 per cent of mortgages in the year to date compared with 25 per cent in 2007. 'Looking ahead, and based on uptake of the scheme so far, we expect the volume of HTB loans to grow, but to become only a modest proportion of lenders' mortgage books over the life of the scheme.' In response Mr Osborne said: 'I was pleased to see the committee's conclusions that the scheme does not pose material risks to financial stability in the UK and has not been a material driver of recent house price growth.' The average house in the UK costs to £188,374, edging down from the all-time peak of £189,306 recorded in August, according to latest figures from Nationwide . The Bank's request for new powers to rein in risky home loans comes after Mr Osborne offered them earlier this year - beefing up its current ability to offer recommendations for controls on the market. It said the availability of powers of direction rather than just recommendation could allow it to skirt the need for time-consuming consultation 'where urgent implementation is required'. 'This can be an important consideration in a market like housing, where quick implementation may be necessary to prevent lenders and borrowers bringing forward transactions in anticipation of policy changes, putting more pressure on the market.' The Bank is asking for powers of direction over LTV ratios as well as debt-to-income (DTI) ratios.
Carney said Help to Buy does not pose a risk to financial stability and has not driven up house buy a property worth up to £600,000. More than of the OECD global economic think tank called for the price limit to be more than halved to prevent