The Central Bank says lenders should consider new limits on the amount of money people can borrow for buying houses.

In a research note it says banks should not lend over 80% of the value of a property.

It also suggests that potential housebuyers should not be granted mortgages valued at over four times their income.

It is understood the Central Bank will publish a consultation paper setting out the proposals in the coming weeks.

It is expected it will propose buyers have a certain level of their deposit before they can take out a mortgage.

The move comes after two separate reports found banks are now giving out loans worth between four and five times the combined incomes of first-time buyer couples.

The Irish Independent personal finance editor, Charlie Weston, says the memo is aimed at protecting banks from repeating the mistakes of the past.