Mortgages should be capped

The government should consider imposing caps on the amount mortgage companies can lend to homebuyers, the deputy governor of the Bank of England has suggested. Sir John Gieve, who is stepping down at the end of the month, said that in theory, a ceiling on loan-to-income and loan-to-value ratios could have provided an effective brake on the excesses of the last housing boom. He also acknowledged that the bank could have set interest rates more appropriately in the decade before the credit crisis began.