The Financial Conduct Authority has published its latest consultation on implementing loan-to-income (LTI) limits on new mortgages from the beginning of October.

The consultation can be found here.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “The move to limit mortgage lending above 4.5x LTI has been anticipated well in advance by several major lenders. Many have already introduced their own measures, meaning that the impact of LTI restrictions will reach the high street far earlier than first October and begin to ration the finance that is available to some consumers.

“Individual measures are a clear sign that the mortgage industry is committed to treading carefully – lenders are keen not to delay any action while rising house prices continue to outstrip wage growth.

“But the fact that some of these steps go beyond the FPC’s recommendations inevitably means that more borrowers will feel the effects. Aspiring first time buyers and younger homeowners will be among the first who find their borrowing options and buying ambitions are limited, particularly in areas where house prices are rising the most.

“It is crucial that the pendulum doesn’t swing too far towards policies that overrule the careful assessments now in place under the Mortgage Market Review.

“Excessive caution could undo recent efforts to give first-time buyers a helping hand. Lenders should always be mindful of personal circumstances and look at the whole picture, including regional variations in house prices, before shutting the door on potential borrowers.”