Britain launched a flagship programme to help people buy their own homes today, offering banks the chance of providing high loan-to-value mortgages without having to set aside punitive amounts of capital.
The scheme, which allows home-buyers to put down a deposit of as little as 5%, has raised fears that housing prices may be heading for a new boom-bust cycle.
It was launched hours after a survey suggested British house prices rose at their fastest pace in 11 years last month.
In a sign of the breadth of concern about the plan, a cross-party committee of lawmakers warned today that it risked raising prices rather than supply.
"Mistakes could distort the housing market or carry threats to financial stability," the Treasury Select Committee said.
Royal Bank of Scotland and Lloyds, both of which are part-owned by the UK government, have said they will start marketing state-backed "Help to Buy" mortgages this week. Smaller lenders Virgin Money and Aldermore have also agreed to sign up.
Other banks are considering whether to sign up.
Prime Minister David Cameron and his finance minister George Osborne brought forward the launch of the mortgage guarantee programme to this week from its original start date in January.
Under the scheme, the government will offer to guarantee up to 15% of the mortgage, helping people who in recent years have been unable to get on the property ladder because they lack the high deposits lenders now require.
Participating banks will not have to set aside capital to cover the state-backed portion of mortgages they offer as part of the programme, the Bank of England said.
"The guaranteed portion of the loan would be treated as an exposure to the UK government," the bank's Prudential Regulation Authority said in a statement.
In exchange for the guarantee, the government will charge a fee of up to 0.9% of the loan's value. This is designed to cover any losses to the taxpayer, if borrowers default, and to comply with European Union state aid rules.
Critics believe the plan was rushed out to give the UK government a boost ahead of a 2015 general election, just as former Conservative prime minister Margaret Thatcher reaped the popularity of a programme to allow people to buy homes they rented from local authorities in the 1980s.
The opposition Labour party says Help to Buy will not fix the fundamental problem of low levels of housebuilding.
The scheme was first announced in March when Britain's housing market and its economy looked in need of help. Since then, property prices have jumped - particularly in London - leading to fears the scheme could cause a new bubble.
A survey by the Royal Institution of Chartered Surveyors showed today that British house prices rose at the fastest rate in 11 years in September and sales hit a four-year high.
The RICS survey showed that UK prices had continued to grow, with a balance of 54% more surveyors reporting rises rather than falls.
It found that they had now been rising steadily since Easter. Last month, they increased in every region of the UK except the North East - where they dropped modestly for the second successive month.
A balance of 49% of surveyors reported a rise in buyer inquiries, the figures showed, compared to only 10% reporting a rise in instructions to sell, meaning not enough to keep up with increasing demand.
Respondents were upbeat about the number of transactions increasing over the next three months as well as price rises.
