The second phase of the government’s Help to Buy scheme – which offers state-backed mortgage guarantees – will come into force from January. Despite criticism from the IMF, the government has insisted the scheme will last for three years. Data released yesterday showed the first phase of the scheme, which offers interest-free loans on new-build purchases, was proving popular with buyers. However, the associated rapid increase in property prices does suggest that they government may have created a housing “bubble”. The Governor of the Bank of England has played down growing concerns about rising house prices….. but continuing signs that the market is overheating could force the Bank of England to raise interest rates from their current 0.5 percent earlier than planned.