This follows changes to regulation in October 2014 when lenders were restricted to a maximum of 15% of the number of new residential mortgages with LTI at or greater than 4.5.

The consequence of this rule change has led to ‘bunching’ below the 4.5 cut off, according to an occasional paper authored by Adiya Belgibayeva, a senior associate in the economics department at the Financial Conduct Authority.

Also known as the LTI flow limit, the aim was to reduce the risk of borrowers over-indebting themselves.

The latest figures on LTI limit flow are from the November 2016 Financial Stability Report, which found that the allocation of credit across LTI ratios has changed since the new rules were introduced.

FCA Guidance Consultation on the LTI recommendation outlined that young first-time buyers and applicants on sole income may be more affected by the introduction of the LTI flow limit and this has proved to be the case.

The loan size for high LTI mortgages (above 4.5 x income) has increased by 4-7% which suggests that lenders have moved towards borrowers with higher incomes.

There were also changes in the type of high LTI borrowers with an increase in the proportion of home movers and joint income applicants and a decrease in the proportion of first-time buyers.

Home movers and joint income applicants are more likely to have higher incomes. The average loan size for home movers is around £190k, for joint income applicants it is £180k, first-time buyers around £150k, and single income applicants £140k.

The study also found evidence that high LTI mortgages have shifted towards the regions with higher average income and house price, which is also consistent with the increase in average loan size.