London homeowners 'hit hard' by property market powers

Chancellor George Osborne is allow the bank to cap the size of mortgage loans.

Latest ITV News reports

Cable: Stable mortgage level 'is three times salary'

It is crucially important that the banks don't throw petrol on the fire. Most of us who have been through various housing booms in the past have recognised that a kind of stable level is three or three-and-a-half times

I was appalled when I discovered that banks were lending five times.

They have already reined it back on advice from the Bank of England but this is the key area that the Bank of England has got to operate in to make sure that this boom in house prices, particularly in the south of England, doesn't destabilise the whole of the economy.

– Vince Cable, Business Secretary

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Vince Cable appalled about the size of home loans

Business Secretary, Vince Cable, says he is appalled about the size of some loans being agreed by some lenders and has urged the Bank of England to use its powers to intervene.

Credit: PA

Vince Cable renewed his stark warnings about the threat to the wider economy posed by soaring house prices in London and the south east amid reports Chancellor George Osborne will tackle the issue in his annual Mansion House speech later.