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Lloyds sets up loan-to-income cap for mortgage claims

Britain's biggest mortgage lender is imposing a new loan-to-income cap on people looking to borrow more than half a million pounds in a bid to tackle the pressure of housing inflation in the London market.

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Lloyds: 'Important we don't disrupt this recovery'

Lloyds group director of mortgages Stephen Noakes has said that while the housing market outside of London was improving the recovery is "fragile" as "prices largely remain below their peak."

He said: "It is important we don't disrupt this recovery. But in London, house prices are almost now 30% above the 2007 peak.

Household wealth is calculated by working out people'd assets such as pensions and houses. Credit: Joe Giddens/PA

"This is largely driven by issues of supply which are particularly acute in London and this is having an impact on income multiples which are failing to keep pace with asset growth.

"This prudent update to our lending policies is intended to manage risks to our business and for our customers."

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