Bank of England To Curb Buy-To-Let Lending?

Thu 22 Oct 2015

[Source: Property Industry Eye, 23rd October 2015]

The Bank of England is to be given powers to control buy-to-let mortgage lending.

In what could be a highly significant move, Chancellor George Osborne said that he will extend the powers of the Bank and the Financial Policy Committee to the sector.

It follows concerns that buy-to-let borrowers could be particularly exposed in any downturn in the market, and that this could rock the wider housing market and the general economy.

Speaking to the Treasury Committee, Osborne said: “I think it’s true that, if you look historically at the UK, one of our biggest challenges has been managing credit booms and house price cycles. That’s why we created the Financial Policy Committee, in part to try to manage some of those risks.”

The Bank of England had earlier said that the Government intended to launch a consultation on buy-to-let lending this winter.

However, this seems to have been overtaken by Osborne’s revelations.

He told the Treasury Committee: “The governor of the Bank and the FPC have asked for additional powers over buy-to-let mortgages which weren’t included, and we have granted those powers.

“I’d better wait until we actually make the announcement, but (it will be) as soon as possible.”

It is not clear what those powers might be, but essentially they could make it harder for a landlord to borrow. Curbs could include a clampdown on the number of buy-to-let mortgages a landlord might have and caps on loan-to-value amounts.

Landlord bodies are likely to greet the news negatively, concerned that the Government’s stance is anti-private landlords.

Osborne’s revelations yesterday follow his Summer Budget announcement that some landlords will no longer be able to offset costs of borrowing against tax. While the Treasury says that only 20% of landlords will be affected by this, the Residential Landlords Association insists the proportion will be 60%. Savills has also produced sums which show that landlords currently making profits will be making losses when the new regime is implemented.

"Been a tenant with Lovetts for the past five years In two different flats and always found them to be really helpful and friendly. Any repairs I had were always dealt with quickly. Only moving as being relocated with work."
Paul S

News Archive

July 2020

A guide to deposit protection schemes

June 2020

Meet The Team - Q&A Series: Anthony Charters

NEW electrical safety standards in force from 1st July.

May 2020

Re-opening the Housing Market: Our Approach

March 2020

Corona Virus - Tenant Update

February 2020

Meet The Team - Q&A Series: Amy Duffy

Meet The Team - Q&A Series

January 2020


August 2019

5 top tips to ensure you find the best tenants

July 2019

How To Make Your New House A Home

June 2019

6 top tips for a smoother property transaction

We now officially have an award-winning Sales Team!

February 2019

In Conversation: Q&A With David Hawkes, Land & New Homes Director

Are you prepared for the forthcoming Letting Fees Bill?

January 2019

BREAKING: Stricter rules for mandatory electrical checks

Fitness For Human Habitation Act Becomes Law

Fitness For Human Habitation Act is now live, but what does this mean for Landlords?

Why is pays to use an agency that specialises in land deals

October 2018

Self managing? How evicting a tenant could fail spectacularly

September 2018

How we handle the three D’s – Death, Divorce & Debt

August 2018

First time buyers outstrip movers for first time in 23 years

July 2018

What does the profile of a modern landlord now look like?

Could your garden offer you the financial security we all strive for?

The top 4 things that put off UK homebuyers on viewings

House sale failures in the UK fell from record high in first quarter of 2018