LONDON, Nov 13 (Reuters) - Britons taking advantage of the government's offer of help to enter the housing market are buying within their means and the government is confident the pre-crisis reckless bank lending is a thing of the past, the new housing minister said.
The government put housing at the heart of its policies for the 2015 general election when it offered to provide and guarantee loans to struggling housebuyers in a scheme that has been heavily criticised by the International Monetary Fund, industry players and politicians.
"What I've been very confident about is not only have we got a way of stimulating the housing market ... but the banks know we will not tolerate the reckless lending in the past," said Kris Hopkins, a Conservative party member who took over as housing minister in the October government reshuffle.
The Help to Buy scheme which allows purchasers to buy homes priced up to 600,000 pounds, has been accused of fuelling house price inflation and has drawn warnings that it could restart the trend of unbridled bank mortgage lending that contributed to the 2008 financial crisis.
The scheme has been particularly helpful to the housebuilding sector, where companies such as Persimmon
Chancellor George Osborne has since asked the Bank of England to make annual checks on the impact of the programme, which has seen more than 2,000 home buyers obtain mortgages in the first month of its broader operation.
"The media is obsessed with a bubble but what we're talking about is a small number of hot spots in London," Hopkins told Reuters in an interview late on Tuesday, "We've not seen anything like the out-of-control situation that we last found ourselves in in 2008.
"It's the Help to Buy scheme for the whole of the country and if you want to get on to the housing ladder at the moment then we need to have those variables," he said of the 600,000 pound threshold.
"If you actually look at the mortgages that people have taken out, the average is actually 155,000 pounds per house... People are actually buying and getting their mortages within their ability to pay," he added.
Asked about reports that the government is considering slapping capital gains tax on foreign property investors in December, Hopkins declined to comment saying that taxation was a matter for Osborne.
Overseas buyers have spent millions on London property over the past few years, lured by the city's safe-haven allure and favourable exchange rates, which has stirred some concerns among Britons that they are being priced out of the city.
"What I would say is that this is an international city, it works by international trade and we're actively encouraging investment," Hopkins said.
"And if you look at the figures in the relation to the number of houses that have been bought (by overseas investors) it's marginal compared with the rest of housing activity. So we shouldn't get obsessed with this activity."
(Reporting by Brenda Goh; editing by Stephen Addison)
((brenda.goh@thomsonreuters.com)(+44 020 7542 2230)(Reuters Messaging: brenda.goh.thomsonreuters.com@reuters.net))
Keywords: BRITAIN HOUSING
