The Bank of England is ending a programme to stoke the British housing market.
The central bank says the Funding for Lending Scheme will cease to offer banks incentives for mortgage lending and instead be refocused on helping small firms to borrow.
Effectively, it will slam the brakes on a property boom, particularly in London, and the news caused shares in house-building firms to tumble.
British house prices have risen by about 7% over the past 12 months, higher in London and the South East of England.
The central bank Governor Mark Carney says he is responding to evolving risk in the housing market.
and supporting mortgage lending is "no longer necessary".
An overheated housing market would be a risk to the economy, he said, adding that prices are rising in many regions.
Shares in leading housebuilders including Barratt Developments and Taylor Wimpey fell by around 5%.
Funding for Lending will be refocused on businesses from January 2014, the governor saysd.
Chancellor George Osborne says : "Small firms are the lifeblood of our economy. That's why we're reforming the banks, introducing the employment allowance and now focusing the Funding for Lending Scheme to support them."
Funding for Lending aimed to provide up to $NZ121 billion to banks and building societies so long as that money was lent to businesses and individuals.
Mr Carney says: "The changes announced today refocus the Funding for Lending scheme where it is most needed - to underpin the supply of credit to small businesses over the next year - without providing further broad support to household lending that is no longer needed."
He adds: "Since the FLS was launched it has contributed to a substantial fall in bank funding cost, this has fed through to a significant improvement in household credit conditions. Given this success there is no longer a need for FLS to provide further broad support to household lending".
Business Secretary Vince Cable says that while he believed that the decision to refocus the scheme away from households would improve borrowing prospects for small and medium sized companies, it was "not a silver bullet".
"One decision isn't going to change quite a deep structural problem. But it is certainly a move in the right direction. As far as small businesses are concerned, there are a whole lot of different issues here."
