The Financial Policy Committee will “consider whether there were any impediments” to lenders raising their 4.5 times loan-to-income limits for firms that “wished to”.  

The key Bank of England body – on which the head of the central bank, the PRA and the Financial Conduct Authority sit – gave this undertaking in the minutes of its April meeting. 

Under the current LTI rules, set by the FPC in 2014, new residential mortgage loans are capped at, or greater than, 4.5 times salary to no more than 15% of total home loans a year.   

However, a range of industry bodies such as UK Finance, the Building Societies Association and the Intermediary Mortgage Lenders Association have also called for this rule to be eased to increase lending, particularly among first-time buyers. 

The FPC says it is “supportive of lenders making use of their individual LTI flow limits consistent with their own risk limits and business models.  

“In support of this, the FPC would consider whether there were any impediments to using those limits for those lenders that wished to.” 

But it adds that “most large lenders were currently materially below the 15% threshold, but their high LTI shares could increase if they changed their approach to testing individual borrower affordability”. 

The FPC minutes did not lay out a timetable for this review. 

Last week, the Prudential Regulation Authority and the Financial Conduct Authority opened discussion on the LTI rule. 

Currently, institutions that lend less than £100m a year are exempt and the regulators propose extending this to firms that lend less than £150m per year. 

But this change would not help major lenders like Nationwide, who have also called for this rule to be relaxed. 

However, the FPC pointed out that last month the FCA reminded lenders of the “flexibility in its interest rate ‘stress test’ rule,” adding that “some lenders had adjusted their approaches as a result”. 

Regulators are concerned that making it easier to get a home loan could push up house prices, possessions and arrears. 

Last month, Financial Conduct Authority chief executive Nikhil Rathi said that possessions are at around 1,000 a quarter, a historically low figure, but “as lenders show greater forbearance, but we have the highest ever number of accounts where arrears are greater than 10% of the balance”.   

Rathi added: “So, there are trade-offs here, people are being kept in their homes, but balances are accruing.”