Royal Bank of
The move came as figures from Nationwide building society showed
The announcement by state-backed RBS, which accounts for one in 10 of all
A spokesperson for RBS said: "We are focused on looking after the interests of our customers and ensuring that they only take on mortgage lending that they can afford."
The move is likely to increase pressure on other lenders to follow suit so they do not become overexposed to the
Andrew Montlake, director at Coreco Mortgage Brokers, said: "There seems to be no coincidence that the two partly state owned banks are the first ones to act in this manner."
The change was likely to have little impact as most people taking mortgages of that size did not require large income multiples, he said. "What it does do, however, is underline a change in sentiment that house price rises will not be allowed to increase for ever, which in turn puts more doubts in the mind of buyers when faced with higher prices and makes the Bank of
Yesterday, Nationwide reported a 13th consecutive month of price rises and said annual price inflation had risen to 11.1%. In cash terms, the average
The latest figures come a day after the European commission warned of "distortions" in the
The Nationwide data stoked the debate about whether the market has reached unsustainable levels, particularly in
"We wouldn't take too much comfort from that," said
Nationwide's latest snapshot of the market, which is based on home loans it approved during the month, showed an easing off of the monthly rate of inflation to 0.7% from 1.2% in April. Its three-month growth figure also fell, from 2.5% in April to 2.3% in May. That brought it to the lowest level since
Recent lending data has suggested that the introduction of tough new mortgage rules in April under the mortgage market review (MMR) has reduced activity, with the latest Bank of
Nationwide's chief economist,
"The underlying pace of activity should become more evident as we move through the summer months and the impact of MMR becomes clearer," he said. "However, with mortgage rates close to all-time lows and labour market conditions continuing to improve, underlying demand for homes is likely to remain strong."
New-build homes in a development in south
Most Popular Stories
- Americans Still Pessimistic Despite Economic Growth
- Apple to Unveil New Items on Sept. 9
- Bogdanovitch Delivers Laughs With 'She's Funny'
- Labor Day Travel Up, Gas Prices Down
- Nintendo Launching 'Amiibo' Toy-game Franchise
- U.K. Raises Terror Threat Level to 'Severe'
- Parra Joins Exclusive Club of Hispanic CEOs
- Axxis Solutions Appoints Benites as CEO
- Obama Puts Ukraine Violence on Russia
- Friends Followed Similar Paths to Violent Jihad