UK's Osborne says homes package won't spur bubble

LONDON (Reuters) - British finance minister George Osborne said on Thursday that new measures to boost home ownership did not risk causing a repeat of the housing bubble that helped usher in the country's financial slump five years ago.

"We're not talking about returning to the situation of four or five years ago where people had 125 percent ... mortgages and self-certified mortgages where no one checked what peoples' incomes were," Osborne told BBC television.

On Wednesday, he announced plans to guarantee 130 billion pounds of mortgages from 2014 for three years, allowing banks to provide more loans to people without big deposits.

The government also committed 3.5 billion pounds ($5.3 billion) over three years to shared equity loans for new-build homes worth less than 600,000 pounds, allowing buyers to purchase them with a 5 percent deposit.

It hopes the moves will help an economy now expected to grow just 0.6 percent this year.

The Royal Institute of Chartered Surveyors, which represents property professionals, said on Wednesday the measures were "much-needed" but that the government "needs to be careful this doesn't create another housing bubble."

Osborne said the plans were prudent and would not put Britain back at risk of a property boom and bust, in large part because the UK housing market was currently flat.

He said the government wanted to help people who would normally be able to buy their own homes but could not afford high deposits now demanded by borrowers.

(Writing by William Schomberg; Editing by John Stonestreet)