19th
Nov 2016
A recent statement from the Finance Ministry said that the Bank of England will be given greater regulatory control of the buy-to-let sector within the next couple of months, to reduce additional risks within the sector.
The Ministry states that early next year the B of E will have greater control over deciding as to whether smaller landlords will be granted mortgages for rental property purchases. This comes as no real surprise as the Bank requested the powers back in 2014, following this the government held a public consultation at the beginning of this year.
The new powers will mean that the Bank will limit loan-to-value ratios on buy to let mortgages, it will also set a minimum amount by which the forecasted rental income from a property can surpass the mortgage interest payments. The B of E currently has this 'jurisdiction' over residential mortgages.
The government said: ‘The Bank of England’s Financial Policy Committee (FPC) will be granted new powers by the government to help it protect the financial system from future risks in the buy to let mortgage market.’
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