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Mortgage lending can come under stricter regulations as the powers of the Bank of England are extended.

Ray Boulger, senior technical manager at John Charcol, was sceptical of the move and termed it unnecessary. He pointed out that the industry had already self-regulated the housing situation by cutting down on available mortgages.

He said: "What effectively we appear to be talking about here is reintroducing some sort of credit control and the big problem with it is it depends on a body at the Bank of England being better able to judge when those credit controls are needed than anybody else."

Mr Boulger was also unsure how effective it would be to put financial controls in place based on previous economic crises to prevent future ones. His argument being that any past financial downturns were all sparked by very typical reasons.

His comments were in response to announcements made by the chancellor of exchequer George Osborne giving additional powers to the Bank of England allowing it to control the amount of mortgage lending that was carried out in the housing sector.

The chancellor has also announced the launch of a Financial Policy Committee and the formation of a new Consumer Protection and Markets Agency to better monitor the activities of financial bodies. This followed from the Financial Services Authority being dissolved.

Ahead of today's emergency Budget the Intermediary Mortgage Lenders Association called on chancellor Osborne to address the lack of funding in the mortgage market to help the housing sector recover after the recession.

Recently, the Council of Mortgage Lenders published statistics which revealed that the proportion of first-time buyers had shrunk to 35 per cent in April this year, which was down from 39 per cent in the month before. Loan approvals also slipped from 45,000 in March to 40,000 in April.