The Bank of England is reported to be mulling plans to ease mortgage lending rules as part of a review of restrictions brought in after the global financial crisis.
One measure that is being examined, the Telegraph reported, is a loosening of affordability checks for borrowers.
At the moment, borrowers have to calculate whether customers will be able to afford an additional 3% interest rate charge after their initial mortgage deal ends.
But as interest rates have been near zero for so long that a hike to 3% seems unlikely, the change is proposed.
Andrew Wishart, a housing economist at Capital Economics, said the changes could cause the housing market to "enter bubble territory" and “would help perpetuate very strong demand that might take prices to an unsustainable level”.