Speaking ahead of keynote annual addresses to London's financial
community by finance minister George Osborne and Bank of England
Governor Mark Carney, Cable said he was "concerned" about rising
Cable said experience of previous housing booms showed that mortgage
loans of around 3-3.5 times people's incomes were seen as stable,
and that he was "appalled" to see some banks lending as much as five
"This is the key area that Bank of England has got to operate into
and make sure that this boom in house prices, particularly in the
south of England, doesn't destabilize the whole economy," Cable told
BBC Radio's Today program.
Lloyds Banking Group and Royal Bank of Scotland both said recently
that for loans over 500,000 pounds ($839,500), they will no longer
give mortgages of more than four times a borrower's income.
Last week, the International Monetary Fund urged Britain to take
steps to cool the housing market, and figures from the Royal
Institution of Chartered Surveyors on Thursday showed house prices
rose faster than expected in May.
Data from mortgage lender Halifax last week showed house prices rose
at the fastest annual rate in more than six years in May.
While tougher rules for London's currency trading hub will be high
on the agenda at Thursday's Mansion House speeches, BoE Governor
Carney may touch on measures to reduce risks to the economy from
rising house prices.
[to top of second column]
The BoE meets next week to finalize a twice-yearly report on
financial stability, and is expected to consider tighter curbs on
But views differ among policymakers on the importance of rising
house prices as a risk to Britain's financial stability.
BoE policymaker Ben Broadbent, who in July will become deputy
governor, said on Wednesday the housing market upturn bears little
resemblance to the debt-fueled booms of the past, adding that it was
more important to watch leverage rather than prices. ($1 = 0.5956
(Additional Reporting by David Milliken and Ana Nicolaci da Costa;
Editing by Toby Chopra)
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