The FPC is responsible for monitoring and intervening in the financial system to minimise systemic risk.

From early 2017, the FPC will be directing the Prudential Regulation Authority and Financial Conduct Authority to require regulated lenders to place limits on loan-to-value ratios and interest coverage ratios for buy-to-let mortgages.

In September 2014, the FPC recommended that it was given new powers over both the residential mortgage lending and buy-to-let mortgage markets.

Philip Hammond, the chancellor of the exchequer, said: “It is crucial that Britain’s independent regulators have the tools they need to keep our financial system as safe as possible.

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“Expanding the number of tools at the Financial Policy Committee’s disposal will ensure that the buy-to-let sector can continue to make an important contribution to our economy, while allowing the regulator to address any potential risks to financial stability.”

Reacting to the news Karen Bennett, Managing Director at Shawbrook Bank Commercial Mortgages said: “We will need to wait to see how the FPC choose to use these powers given the recent clarification of the PRA consultation paper and subsequent requirements.

"Regulation that effectively supports and protects the customer should always be welcomed, however it would seem logical that the new standards revealed in October and set to be implemented officially in January, are given the time to bed in prior to deploying any additional measures.”