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The Bank of England has slightly relaxed some of the mortgage constraints it discussed at the start of summer, in response to the cooling housing market.

In June the Bank's Financial Policy Committee recommended that "as soon as practicable" no more than 15 percent of mortgages should be at, or greater than, 4.5 times a borrower's income. It went out to consultation with the mortgage industry on this proposal.

However, Reuters reports that the final regulations - issued yesterday - stated that the Bank's Prudential Regulation Authority had proposed that firms which report less than £100m of new mortgage lending a year would escape the net.

This will avoid a "disproportionate" impact on "niche" lenders the PRA said.

The news has been greeted enthusiastically by the Council of Mortgage Lenders.

"We're pleased that the PRA listened to the CML and other organisations who argued that the high loan-to-income lending limit was anomalous for niche lenders in the high net worth lending market. While it is not yet entirely clear how this approach will affect individual lenders, it's a clear improvement on the original implementation proposal" says CML director general Paul Smee.

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