Lloyds Banking Group says it will limit mortgage lending to four times income for loans worth more than £500,000. Lloyds said the move was to address "specific inflationary pressures in the London housing market". Its action comes as figures show prices rising at an average of 8% a year - with far bigger gains seen in London. On Sunday, the Bank of England Governor Mark Carney warned about the risks of high loan to value mortgages.

"Whilst the housing market outside of London is starting to improve, the recovery is fragile and prices largely remain below their peak. It is important we don't disrupt this recovery," said Stephen Noakes, group director of mortgages at Lloyds. "But in London, house prices are almost now 30% above the 2007 peak. 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," he added.................Read more here