The Chancellor of the Exchequer is giving new powers to the Bank of England to help dampen the current and future housing booms (Guardian coverage here). The Bank will in essence be able to limit mortgage lending and set constraints on the size of loan-to-value ratios or income-to-loan ratios. There are also plans to build more more homes to address the shortage of homes in the south-east of England. Mark Carney in his Mansion House speech (see video below) states the Bank is not interested in targeting asset prices or bursting bubbles, but they are interested in constraining excessive build-ups of debt and leverage.
Bank of England constraints on bank credit existed from the Second World War until the 1970s. In particular, there were quantitative and qualitative constraints on lending to the property and other 'speculative' sectors. I discuss these credit constraints and how they enhanced banking stability in a chapter in my forthcoming book.