6. What recent progress he has made on implementation of the mortgage guarantee scheme. (900224)

The Government are making good progress in working with mortgage lenders to introduce the mortgage guarantee scheme from January 2014. The scheme would allow people who can afford repayments on a mortgage but do not have a large deposit to own their own home.

The dangers of feeding a housing bubble are real. According to the Office for National Statistics, house price inflation in Greater London is four times higher than in the rest of the United Kingdom. Will the Minister confirm his assessment as to the extent that funds spent on the scheme in Greater London will exceed their pro rata share, based on the UK’s population?

The scheme comes into effect in January. Government Members believe that home ownership should not be reserved for the well-off and the children of the well-off, which is why we are introducing this measure. The average deposit has risen to 79% of the income of a first-time buyer. That is why we are introducing the scheme: we are determined to help ordinary working people who want to own their own home.

I recently met a constituent who purchased a one-bedroom flat at the height of the boom when she was single. She is now married and expecting her first child. They are desperate to move but are in negative equity and cannot move, despite having two good incomes and good savings. Will the mortgage guarantee scheme offer a positive solution for my constituents, and how can they access the scheme?

Yes it will. The scheme is available to purchasers who already own their own home but want to move to a bigger one, perhaps because, like my hon. Friend’s constituents, they have had children. They are currently trapped in the home they have bought, and that is why the scheme we are introducing is important. It will allow people who can afford to pay the mortgage to achieve their dream of home ownership.

The mortgage guarantee scheme does nothing to help housing supply. In those circumstances, many organisations suggest that the scheme will be inflationary. What is the Minister doing to reassure those who are concerned that the scheme will increase house price inflation?

The hon. Gentleman is wrong to say that the scheme has done nothing to encourage supply; 10,000 homes have been started under the current scheme. The Home Builders Federation itself has said that a lack of affordable mortgage availability remains the biggest constraint on housing supply. That is a problem; we are solving it.