MOVES to cool the housing market have been welcomed by a Bradford building society chief who has also praised the Bank of England for not imposing a blanket loan-to-income cap on all new mortgages.

The Bank of England has warned lenders to prevent a build up of risky, high value loan to income mortgages. Its Financial Policy Committee said loans of 4.5 times a borrower's income or higher should account for no more than 15 per cent of new mortgages issued by lenders.

It said also that lenders should apply a new "interest rate stress test" ensuring that borrowers can keep up their mortgage repayments in the event of a rise of up to three per cent in interest rates.

Andy Caton, (pictured) director of Bradford-based Yorkshire Building Society , said: "We are pleased to see the Bank of England taking a sensible approach to limiting the chances that the current recovery in the housing market may turn into a future bubble.

"We would have had concerns about the introduction of a blanket loan-to-income cap on new lending, which would have been a very blunt tool, and could have locked out those people who are trying to get on the housing ladder and are genuinely in a position to take on a mortgage at a relatively high multiple of their earnings."