The Royal Bank of Scotland (RBS) will be introducing tighter restrictions on mortgage lending in an effort to make sure customers can afford their loans.
RBS, which owns NatWest, will restrict customers to borrowing four times their income on loans of £500,000 or more.
RBS says it will address inflationary pressure in London, where prices rose at an annual rate of 17%, according to the latest Land Registry figures.
It follows a similar move by Lloyds Banking Group last month.
RBS says the new measures will only affect 2.6% of its volume of mortgage lending in the London market.
Outside London, that figure falls to just 0.5% of volume, or less than 500 mortgages.
A spokesperson for RBS and NatWest said: "We are focused on looking after the interests of our customers and ensuring that they only take on mortgage lending that they can afford."
The new policy will apply to all RBS and NatWest mortgages from later this month.
RBS is 81% owned by the government after being rescued during the financial crisis.
The European Commission believes the UK should be doing more to curb rising house prices.
It called on the UK to raise taxes on higher value properties, build more houses and adjust the Help to Buy scheme.
In a review of UK economic policies, it said council tax bands should be revalued and action taken to address "rapid" house price rises in London.