In London, where house prices have risen by over a quarter in the past year, Bank of England statistics suggest income ratios above 4.5 per cent have risen from 12 per cent in 2007 to 17 per cent now.

Estate agent Haart figures out today show average London property prices reached £501,056, up 26.1 per cent annually and 4.3 per cent month-on-month. This is annual growth of £103,761 fuelled by a massive in-balance of supply and demand.

Lloyds, the UK’s biggest mortgage lender, has moved to stop borrowers over-reaching themselves ahead of any upward movement in interest rates from 0.5 per cent.

This policy change will take effect immediately and applies to mortgage lending through Halifax, Lloyds Bank, Bank of Scotland and Scottish Widows Bank.

It will affect 8 percent of its lending in the capital, Lloyds said.

Stephen Noakes, group director of mortgages said: “Whilst the housing market outside of London is starting to improve, the recovery is fragile and prices largely remain below their peak. It is important we don’t disrupt this recovery.

“But in London, house prices are almost now 30 per cent above the 2007 peak. This is largely driven by issues of supply which are particularly acute in London and this is having an impact on income multiples which are failing to keep pace with asset growth.”

“We’re not seeing such issues across the rest of the UK and therefore this is a targeted response to an issue largely in the upper tiers of the London housing market. This prudent update to our lending policies is intended to manage risks to our business and for our customers.”

Noakes added that the group continues to support the Help to Buy mortgage guarantee scheme as it has raised confidence in the housing market particularly outside of London. The scheme only accounts for 2 per cent of purchases in London overall.