Cable: Warns against 'petrol on fire' of housing boom

The Business Secretary has said that banks must be put under more pressure not to "throw petrol on the fire" of the house price boom by lending people mortgages worth up to five times their salaries.

Vince Cable has expressed concern. Credit: PA

Vince Cable said he had been "appalled" to discover the size of loans being agreed by some lenders and urged the Bank of England to use its powers to intervene.

He told BBC Radio 4's Today: "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."