Regulators will consult over raising the loan-to-income flow limit threshold in mortgage lending.  

The Prudential Regulation Authority and the Financial Conduct Authority have confirmed they will open a discussion with firms over an issue which lenders say caps lending. 

Current LTI rules cap new residential mortgage loans at, or greater than, 4.5 times salary to no more than 15% of total home loans a year.  

Institutions that lend less than £100m a year are exempt from this rule. 

Regulators propose to extend this exemption to firms that lend less than £150m in home loans a year. 

The PRA says: “The change would address inadvertent regulatory tightening by increasing the value of residential mortgage lending that small lenders can extend before becoming subject to the LTI flow limit, thereby contributing to the regulators` secondary objectives on competition, and therefore competitiveness and growth.” 

Regulators say their consultation will close on 8 May. 

More follows . . .