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LONDON, June 12 (Reuters) - British finance minister George Osborne said on Thursday that he would give the Bank of England legal powers to stop Britons taking out mortgages that are too big compared with their income or the value of their home.
Osborne, in comments released before he gives a major speech in London, said the housing market was not an immediate threat to Britain’s financial stability but could become one in future.
“I am acting against future risks in the housing market by today giving the Bank of England new powers to intervene and control the size of mortgages,” he said.
The BoE’s Financial Policy Committee is already able to recommend that lenders adjust mortgage conditions, but cannot force them to take specific measures on mortgage loan-to-value and loan-to-income ratios.
* For a more detailed article, see (Reporting by David Milliken)