THINGS are "looking up" for Britain, George Osborne, has declared but he denied that the country was witnessing a short-term housing boom.

The Chancellor insisted there was a "broad-based" recovery, which was in its early stages, saying: "Although things are looking up, we mustn't let up."

Denying that the recovery was a "short-term asset-led boom" based on rising house prices, he went on: "We've got to go on doing the things necessary to fix what went wrong in our economy and this government's got an economic plan to do that."

Asked if three more promised years of zero interest rates could just fuel a housing bubble, Mr Osborne said: "Outside the centre of London...there is not some housing boom or some dramatic increases in house prices.

"There are many thousands of families who can't begin to afford the mortgage deposits that are required to buy a house. They aspire to own their own home - that's a noble aspiration - and I want to help them. Our Help to Buy scheme is helping people get their homes."

He said the Coalition's whole approach was to avoid a situation where Britain was wholly dependent on the City of London.

But Sam Bowman of the think-tank, the Adam Smith Institute, said: "It is crazy for the Government to stoke demand even more without addressing supply and claim that this will help the housing market."

Providing taxpayer-subsidised handouts to homebuyers would only drive further house prices up, risk a bubble, improve access for a select few but make housing even more unaffordable for most people, he said.