Chancellor George Osborne has given new powers to the Bank of England's financial policy committee (FPC) to report on the Government's Help to Buy scheme annually.
The FPC, which said this week it was "vigilant" and ready to act over the threat of an overheating housing market, will now assess the scheme every September. It had been due to look at the scheme only after three years.
In a separate development, Bank governor Mark Carney has said in an interview that, given the improving wider economy, he did not see the case for boosting the bank's £375 billion quantitative easing (QE) stimulus programme.
Help to Buy was launched earlier this year, offering loans to help buyers with a deposit of just 5% to purchase newly-built properties.
The scheme will be extended in January to offer mortgage guarantees, including existing homes as well as new-builds, on properties worth up to £600,000.
It has already been widely credited with spurring a surge in home sales and driving up prices - as well as profits for major housebuilding firms.
Critics argue it is creating another unsustainable price bubble in the housing market.
Mr Carney has already said the Bank of England could intervene to dampen the surge by imposing requirements on how much cash lenders hold and recommending tighter mortgage affordability tests to regulators.
The FPC said earlier this week that it would "closely monitor developments in the housing market" and would be "vigilant to emerging vulnerabilities".
Now, Mr Osborne has asked the committee to work with him every September to assess the impact of Help to Buy.
A Treasury spokesman said: "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 fee charged to lenders - remain appropriate.
"At the end of the scheme's three-year life, if a future government proposes to extend the scheme, the FPC will have to give its agreement."
The new powers for the Bank were announced as Nationwide reported house prices have risen at their fastest annual pace in more than three years in September as the market revival spread across the UK.
For the first time since 2007, all 13 UK regions have seen annual house price growth in signs that "the pick-up is becoming increasingly broad-based", the building society said.
The annual rate of house price increases rose to 5% across the country, marking the strongest uplift seen since July 2010.
Latest official figures from the Office for National Statistics showed that house prices in England had recovered to surpass their pre-recession peak, though this was skewed by a rise of nearly 10% in London. The UK overall is still catching up.
The Council of Mortgage Lenders (CML), representing banks, building societies and other lenders, welcomed the annual review of Help to Buy.
It said: "Lenders who choose to participate in the scheme need to know that they are operating in a predictable environment.
"An annual review, especially if it gives good notice of any changes to the fees that lenders need to pay, or the eligibility of loans under the scheme, will be essential."
The wider recovery is being supported by the Bank's QE programme injecting billions into the economy.
In a new interview, Mr Carney told the Yorkshire Post that it would consider the case for more QE should the upturn falter.
"But my personal view is, given the recovery has strengthened and broadened, I don't see a case for quantitative easing and I have not supported it," he said.
Shadow chancellor Ed Balls said instead of waiting a year, the Bank should review details of the second phase of Help to Buy now before it goes ahead in January.
Mr Balls said: "It's totally ill-thought through for George Osborne to decide that a scheme which should be about helping first time buyers will allow taxpayer backed mortgages for homes worth up to £600,000.
"And George Osborne is still failing to address the fundamental problem of the lowest level of house building since the 1920s. You can't deal with the cost of living crisis without building more homes."
© 2013 Press Association