How the Government could backtrack from Help to Buy That is the primary concern of critics. The Government appears hell-bent on boosting house prices. It launched an £80bn Funding for Lending Scheme last year, which pushed down the cost of borrowing. Official figures yesterday showed mortgage rates at a fresh all-time low. Then came the two parts of Help to Buy. The first element, eligible on newbuild, began in April. The second, more controversial strand, will see £130bn-worth of taxpayer money offered as guarantees to any borrower with a small deposit or low equity that wants to buy or move up the property ladder. The state will guarantee up to 15pc of a mortgage on homes worth up to £600,000. The idea is that this will help them get access to the lower rates offered to those with bigger deposits. Rising property prices are great for governments, and particularly this one. It's not just that a general election is less than two years away - and the feeling of rising prosperity helps sway opinions, but also this particular government has billions of pounds sunk into Britain's biggest mortgage lender, Lloyds Banking Group. It is keen to sell. The upturn in the market should now be sending alarm bells ringing in Downing Street. It's not so much that prices are rising at an annual rate of nearly 6pc, but the other indicative signals from the economy. Just today, it emerged that unemployment had fallen from 7.8pc to 7.7pc but with the biggest quarterly growth being driven by jobs related to "real estate activities." Estate agents are very busy. Barratt Homes today said buyers must find another £15,000 to secure one of their homes, with the average selling price up 9pc on a year ago to £195,000, and the chief executive of Barclays yesterday raised his concern about a "property-driven boom." Meanwhile the boom in buy-to-let rolls on, with lending up by a nearly third on a year ago. But No.10 is sticking by its guns. "It will be launched," the Prime Minister's spokesman said. We are faced with a situation - because of the fall in availability of 90pc to 95pc loan-to-value mortgages - where many first-time buyers are faced with a real obstacle to making a home of their own. It is important we address this issue. But as so many critics have rightly pointed out, pushing up house prices will do little to help first-time buyers, merely pushing prices further out of reach for many. Those who do manage to buy with taxpayer help will be buying homes that are valued well above historic norms. Both buyer and taxpayer are exposed to losses. If the trends continue, and prices rises accelerate, the question for the Government will be how to backtrack from Help to Buy, without the embarassment of cancelling it. That would not be difficult. The 15pc of the mortgage the Government is willing to guarantee could be reduced. Or the whole project could just be scaled back from the £130bn-worth of guarantees being offered. Offer less and the impact on the market - and risk to taxpayers - is greatly reduced. Or the braver decision, the correct decisions could be made and HtB2 could just be scraped. How Help to Buy works First phase (new homes only) Those with a 5 per cent deposit can borrow up to 20 per cent of the value of a new home from the Government in the form of a loan that is interest-free for the first five years. The remainder is funded through a mortgage via one of the participating lenders, such as Nationwide, Woolwich, Halifax or NatWest. Most offer specific Help to Buy mortgages, though Nationwide allows access to its usual product range. Borrowers can get much better rates than those normally available to those with just a 5 per cent deposit, as they effectively have a 25 per cent down payment. Rates start at 2.44 per cent fixed for two years or 2.64 per cent for three years, both from Nationwide and with a £499 fee. Higher rates are offered by Teachers Building Society, Chorley Building Society or Newbury Building Society. After five years, if the government loan has not been repaid, it will start to incur interest at a starting rate of 1.75 per cent, rising by 1 per cent (of that figure) per year, plus inflation. So if inflation were 2 per cent, the mortgage rate the following year would be 1.8 per cent. Letting out the home is not allowed. Second phase (new and existing homes) Borrowers still need a 5 per cent deposit, while the lender will be able to get a guarantee from the Government covering up to 15 per cent of the value of the property. So it will view that buyer as posing less risk and make them more inclined to lend and with bigger loans. The lower rates usually reserved for those with bigger deposits, perceived as lower risk, would also open up to these buyers. Help to Buy is open to people moving home as well as first-time buyers, so has more scope than previous government schemes. There is no limit on the level of your income but the value of the property must be no more than £600,000.