The free market think-tank, which published a paper on the government-back scheme, said the housing crisis could only be resolved by relaxing planning laws and encouraging housebuilding.

It was not clear that the Help to Buy equity loan, which is only available for new-build homes, had stimulated more housebuilding, it said.

ASI research director Sam Bowman said: “It is crazy for the government to stoke demand even more without addressing supply and claim that this will help the housing market.

“Making taxpayer-subsidised handouts to homebuyers will only drive further house prices up, risking a bubble, improving access for a select few but making housing even more unaffordable for most people.”

The report also questioned the level of risk to which Help to Buy exposed taxpayers, and pointed to the example of the US government-backed mortgage providers Fannie Mae and Freddie Mac in the financial crisis of 2008, when a 0.4% taxpayer liability turned out to represent trillions of dollars.

According to the think-tank, users of Help to Buy would benefit at the expense of those who failed to use the subsidy scheme: “The policy is like putting a platform under the buyer while also raising the bottom rung on the housing ladder.”

The ASI’s concerns follow in the wake of those voiced by economists and mortgage industry professionals that Help to Buy could trigger a house price bubble.

Others have questioned the details of the Help to Buy mortgage indemnity guarantee due to launch in January 2014. 

However, the government has pressed ahead with its scheme and last week Bank of England governor Mark Carney played down fears of a housing bubble.