VC: The controversy is over the second part of the scheme, which is a guarantee scheme that does not take effect until the new year. And obviously the government is going to have to look at that in the light of the way the market is developing. The Bank of England also has a view about these things.

JH: To be clear, you think the government should rethink the second part of the scheme?

VC: Well, we should certainly think about how it should come into effect, whether indeed it should come into effect, in the light of changing market conditions. We don't want a new housing bubble.

JH: Do you see any signs of a new housing bubble?

VC: Well, there are people out there, the Royal Institute of Chartered Surveyors yesterday were warning this was a real risk. I think in many parts of the country it clearly isn't a problem. If you are in Northern Ireland or Wales or indeed the East Midlands you would wonder what all this is about. But certainly in London and the south east, in the north east of Scotland, in other areas, there are serious housing inflationary pressures.