A report by the Committee of Public Accounts evaluating the equity loan element of Help to Buy said the department had failed to properly assess what other options were available to boost house building. It said this went against the Treasury’s good practice guidelines.

The Committee said the scheme was having different impacts in different areas and called on the government to assess its impact at a local level and tailor the scheme so it is effective in all areas.

While 13,000 houses were purchased using the scheme in its first nine months, the government estimated only 25% to 50% led to the construction of a home that would otherwise not have been built.

The Committee welcomed DCLG’s commitment to a full evaluation of the scheme in 2015 which will look at the value for money it provides the taxpayer.

The report also highlighted the risks associated with government managing a portfolio of debt and the costs associated with this.

“Before introducing the Scheme, the Department did not consider alternative ways to deliver its objectives, which goes against HM Treasury guidance,” the report said.

“The Department acknowledged that its business case for Help to Buy, which underpinned its decision to introduce the scheme, did not contain any such assessment of alternative options. Yet the Department will now spend nearly £10bn supporting this scheme up to 2020.

“The Department cannot say whether its chosen scheme is the best way to achieve its intended objectives of increasing access to mortgage finance, increasing housing supply and contributing to economic growth.”