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Britain scales back loan program

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November 28, 2013 10:37 AM EST | AP

LONDON (AP) — The Bank of England has scaled back a loan program meant to spur economic recovery, amid fears that cheap mortgages could inflate a housing bubble.

The Fund for Lending program was launched in June last year by the bank together with the Treasury to help homes and businesses emerge from the crisis. But starting in January, the plan, which offers cheap finance to banks to encourage lending, will only be available to small- and medium-sized businesses.

Property prices have gathered momentum since the plan was announced, with average prices rising 6.8 percent in the year to October.

Bank of England Governor Mark Carney says that acting now reduces the likelihood of larger interventions later. While he didn't see any immediate threat, he says the "concern is where this could go."