In June 2014, the Financial Policy Committee (FPC) made the following Recommendation:
‘The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) should ensure that mortgage lenders do not extend more than 15% of their total number of new residential mortgages at loan to income ratios at or greater than 4.5. This recommendation applies to all lenders which extend residential mortgage lending in excess of £100 million per annum. The recommendation should be implemented as soon as is practicable.’
On 1 October 2014, the PRA and FCA published their respective approaches to implementing this Recommendation: the PRA issued a policy statement, and the FCA issued general guidance - see Key Resources below.