The Bank of England could step in to curb mortgage lending amid fears Britain's booming housing market could threaten the economic recovery, Governor Mark Carney has said.
Mr Carney suggested that the bank could impose a new "affordability test" for borrowers as well as reining in the Government's controversial Help To Buy scheme, which provides taxpayer-backed guarantees for homebuyers.
"We could do more, we could take steps around affordability to test whether or not individuals can afford mortgages at much higher interest rates," he told Sky News's Murnaghan programme.
"We could limit amounts of certain types of mortgages that banks could undertake, we could provide advice – the Chancellor has asked us if we would provide advice on changing the terms of Help To Buy – all those things are possibilities."
Mr Carney said the housing market potentially represented the "biggest risk" to the economic recovery.
With approvals for large mortgages on the increase, he expressed concern about the dangers of another "big debt overhang" building up.
But while the bank was monitoring the situation closely, he said there was little it could do about the "deep, deep structural problems" in the housing market, with demand for homes outstripping supply.
Mr Carney surprised some analysts last week when he played down the prospects of an early rise in interest rates – despite the fears of a housing bubble.
He said the Bank of England was watching to ensure the banks had enough capital to withstand the risks involved.