It has been announced that the Treasury is consulting with the Bank of England (BoE) to see if it needs more powers to limit buy to let mortgage lending reports landlordzone.co.uk
At a time when competition is fuelling a lending bonanza and increasing the outstanding buy to let debt the warning from the BoE about the potential risks to banks should the markets experience another downturn, is being taken “very seriously” by the Treasury.
In the report, data from the Council of Mortgage Lenders (CML) shows that following the financial crisis the buy to let sector shrank considerable but has subsequently shown a greater recovery than other market sectors.
The Governor of the BoE, Mark Carney, had requested “additional powers” prior to the July Summer Budget in an effort to control the lending in the same way that owner occupier loans have been curbed. With the buy to let mortgage market currently standing at approximately 17% of all mortgage lending the potential threat to the financial system is at a considerable level, hence the concerns from both the BoE and the Treasury.
According to the report, the BoE has been granted powers to impose restrictions in the buy to let mortgage market.
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