* Cameron says agrees with BoE's Carney on housing risks
* Carney: Housing market poses domestic risk to recovery
* Cameron says would consider scaling back mortgage scheme
* Property prices soaring in London (Adds Lloyds tightening lending policy in London)
By Guy Faulconbridge
LONDON, May 20 (Reuters) - Prime Minister David Cameron onTuesday gave his strongest signal yet that Britain may need tocool its red-hot property market, saying he agreed with the Bankof England that the housing market was the biggest risk tofinancial stability.
House prices are soaring in London and have risen by a tenthover the past year in Britain as the economic recovery andrecord-low interest rates tempt purchasers back into one of theworld's most expensive property markets.
But Bank of England Governor Mark Carney warned on Sundaythat the housing market posed the biggest domestic risk to thefinancial stability of Britain's $2.5 trillion economy.
"I agree with everything he said in his interview," Camerontold BBC radio. "It is absolutely right that we are alert to anydangers and problems."
Cameron also said he would consider scaling back thegovernment's 'Help to Buy' mortgage guarantee scheme if Carneyadvised such a step would be prudent.
Carney, who has repeatedly refused to be drawn on whether hesees signs of a property bubble in London, said the Britishhousing market has "deep, deep" structural problems, chief amongthem insufficient construction of new homes.
Such stark warnings from Carney and now Prime MinisterCameron indicate a growing acceptance that something needs to bedone to cool the market, especially in London where even someestate agents admit the soaring prices are unsustainable.
Hours after Cameron spoke, Lloyds Banking Group,Britain's biggest retail bank, said it was introducing toughercriteria on mortgage lending to help tackle rising prices inLondon's housing market.
The bank, which is 25 percent owned by the government, saidit would limit mortgages to a maximum of four times a borrower'sannual earnings when it is lending more than 500,000 pounds($842,400) on a property.
The bank said the policy change will affect about 8 percentof its lending in London.
HOME OWNING DREAM?
Cameron's coalition government has faced calls from theopposition Labour party to scale back its 'Help to Buy' mortgageguarantee scheme which Cameron launched last year on the eve ofthe Conservative Party conference.
When asked if the government would consider changing thescheme to reduce its upper borrowing limit, Cameron said: "Ofcourse. We will consider any changes that are proposed by MarkCarney."
'Help to Buy' allows people to buy property worth up to600,000 pounds ($1.01 million) with deposits as low as 5percent.
Carney said the BoE was checking the programme, which hesaid was targeted and relatively small though he cautioned itcould grow a lot.
Cameron said the average property price bought under Help toBuy was 160,000 pounds and that 85 percent of the purchases wereoutside London and the south-east of England.
For Conservatives, 'Help to Buy' is the successor toMargaret Thatcher's 1980's 'Right to Buy' scheme which gave theresidents of state-owned housing the right to buy their homes.
"Since the Second World War, Conservative leaders havealways believed in a property owning democracy," Cameron said."I have tried to relight the right to buy fire ... I want to seemore people buy and own their homes."
The BoE's Financial Policy Committee, whose main task is toidentify and remove risks to Britain's financial system, meetson June 17. ($1 = 0.5943 British Pounds) (Additional reporting by Belinda Goldsmith and Matt Scuffham;Editing by Andrew Heavens/Mark Heinrich)
Lloyds (LLOY)
