Critics of the scheme, which allows people to buy homes worth up to £600,000 with a deposit of 5%, say it will cause an unsustainable housing bubble inflating prices so that home ownership will remain out of reach for many.
In an article written for the PoliticsHome website Balls said: “By simply boosting demand with Help to Buy while failing to take action to boost housing supply George Osborne risks making home ownership even further out of reach of the aspiring first-time buyers the scheme should be helping."
He added: “It is why I believe the Bank of England must now urgently review the details of the Help to Buy scheme.”
Balls said that stamp duty receipts were up 39% which reflected a booming housing market all across the UK.
He criticised the lack of sense in a scheme which he said should be about helping first-time buyers but was offering tax-backed mortgages on homes worth up to £600,000.
He added: “What we urgently need now is action to secure a strong, balanced and sustainable recovery and long-term reforms to earn and grow our way to higher living standards, catching up all the lost ground and delivering for the many not just a few at the top.”
