In a new set of proposals published today the government laid out its plans to give the BoE increased oversight of residential mortgage lending as it looks to reduce the risk that the housing market could overheat.
Chancellor George Osborne said: "Ensuring the stability of the UK housing market is a crucial part of this government’s long term economic plan, and I have been clear that the independent Bank of England should have the tools it needs to do this.
"That’s why the government is consulting on this issue, to ensure that we can bring forward appropriate legislation to give the Bank the powers it needs."
The government already works closely with the central bank to ensure the ongoing stability of the UK housing market.
In June, the Bank issued a recommendation over mortgage lending limits, with new regulations introduced earlier this month capping the number of loans that banks can offer at above 4.5x income.
The consultation document said that the government is proposing that the Bank is granted powers of direction for loan to value limits and debt to income limits for owner-occupied mortgages.
The government intends to consult separately in 2015 on the Bank’s recommendations for it to have new powers over the buy-to-let market.