Alistair Darling fires warning to mortgage lenders

Alistair Darling said banks and building societies must be more responsible with their lending to stop for fuelling an ‘unsustainable’ boom in house prices

This follows a warning from the IMF saying Britain’s economy was hugely susceptible to a housing-market slump.

Mr Darling said ‘An unsustainable house price inflation is not good for individuals, is not good for the economy, so I think it will slow down
He demanded Banks ask ‘more searching questions’ to prevent borrowers overstretching themselves  and take more account of whether the borrower is able to pay back the loan.

Last year Abbey, Britain’s second-biggest lender, changed its rules allowing it to grant loans of five times the borrower’s salary, and sometimes up to seven times.