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George Osborne pictured tonight at Mansion House. Credit: Reuters

The Chancellor George Osborne has tonight set out "radical" planning reforms designed to help build up to 200,000 new homes.

The controversial proposals, announced during his annual Mansion House speech, would see councils forced to pre-approve brownfield sites for housing developments.

Mr Osborne also said it was important that the Bank of England was able to act "independently of politics" and take action by itself with new legal powers, to help fix Britain's housing market.

These were expected to be in put place by the end of next May.

"I want to make sure that the Bank of England has all the weapons it needs to guard against risks in the housing market," the Chancellor said.

"I want to protect those who own homes, protect those who aspire to own a home, and protect the millions who suffer when boom turns to bust."

Chancellor gives Bank powers to restrict 'risky' mortgages

Labour's shadow chancellor Ed Balls said:

George Osborne is still failing to tackle the root cause of the housing crisis which is that we are not building enough homes to match rising demand.

Over the last few years Labour has repeatedly called for action on housing supply, but the Chancellor has failed to act.

Under this government housebuilding has reached the lowest peacetime levels since the 1920s.

You can't deal with the cost-of-living crisis and create a strong and balanced recovery without building more homes.

Chancellor gives Bank powers to restrict 'risky' mortgages

The Chancellor George Osborne has said ahead of his annual Mansion House speech:

I am acting against future risks in the housing market by today giving the Bank of England new powers to intervene and control the size of mortgages.

Chancellor gives Bank powers to restrict 'risky' mortgages

Chancellor George Osborne says he will give powers to the Bank of England to control mortgage sizes. Credit: Reuters

George Osborne has said he is to give the Bank of England legal powers to stop people taking out mortgages too large for them to pay off.

In his annual Mansion House speech, the Chancellor is to set out how the Bank will be able to order restrictions on the ratio of mortgage loans compared to borrowers' incomes, or to the value of their house.

In his speech, Mr Osborne is expected to say that while the housing market does not pose an immediate threat, it is important to insure against risks in the future.

Chancellor gives Bank powers to restrict 'risky' mortgages

Chancellor George Osborne says measures unveiled today will help prevent "future risks" to the housing market by letting the Bank of England intervene on the size of mortgages homebuyers can obtain.

Mr Osborne also said action to build more homes would help more people get on the housing ladder.