Barclays informed brokers it began capping residential mortgage applications over 80% Loan to Value at 4.5 times income on Tuesday this week.
The Bank of England introduced new rules from 1 October which mean that no more than 15% of mortgages issued by a lender should exceed a loan-to-income ratio of 4.5.
The Treasury also adjusted the Help to Buy scheme in line with these proposals, so no Help to Buy loans with a loan-to-income ratio exceeding 4.5 can be accepted.
A Barclays spokesperson said: “This change is part of our on-going business planning and something we always keep under review.”
Lloyds, NatWest and Accord all introduced Loan to Income caps on parts of their lending portfolios last year and the Intermediary Mortgage Lender’s Association (IMLA) spoke out in October, suggesting all these measures were slowing lending and putting those unable to gain credit at risk.
