The Chancellor has asked the Bank of England to take a bigger role in ensuring his Help to Buy housing scheme does not fuel a property boom.
The Bank's Financial Policy Committee (FPC) will make annual reviews of the scheme, starting next September.
The committee had been due to make an assessment of Help to Buy only after its first three years of operation but George Osborne has stepped in after the recent recovery in parts of the housing market raised concerns about the impact of the scheme.
Figures from the Nationwide Building Society suggest year-on-year house price increases in all regions of the UK in the third quarter of 2013 - the first rise across the board for nearly six years. However, there were significant regional differences. London recorded a 10% annual change, but the North of England saw a 0.2% rise over the same period.
Help to Buy was originally launched to help buyers of new properties. A second, potentially much bigger phase of the scheme is due to begin in January to assist buyers who might otherwise be unable to afford a down payment on a home.
The scheme provides taxpayer insurance for up to 15% of a mortgage on houses worth up to £600,000, allowing banks to provide up to 95% mortgages at a reduced risk.
Now it has been confirmed that the Bank of England's FPC will be able to modify parts of the scheme to keep it in check. It will be allowed to review the scheme and could reduce the £600,000 cap, so fewer homes are affected.
The FPC could also also make loans less attractive by recommending that the Treasury raises the fees paid by lenders for the guarantees.
The Treasury said in a statement: "Now that the FPC have set out their latest assessment of the housing market... we are setting out more detail on how its role will work.
"The FPC's assessment this week - in line with that of the chancellor and the [Bank of England] governor - is that recent developments in the housing market represent a broadening recovery from low levels of activity, but that we must remain vigilant as that recovery progresses.
"The chancellor has asked the FPC to work with him every September, starting next year, to assess the ongoing impact of the Help to Buy scheme. Following that annual assessment, he has proposed that the FPC advise him on whether the key parameters of the scheme - the price cap and the fees charged to lenders - remain appropriate."
