Bank of England may put cap on lending for buy-to-let landlords
THE BOOMING buy-to-let mortgage market is putting the UK’s banking system at risk, the Bank of England has warned.
Officials are watching for lenders making it easier for would-be landlords to get loans, with the government weighing up whether to give the Bank powers to cap buy-to-let lending as it can for owner-occupied loans. A sudden fall in house prices could be worsened if landlords are forced to sell their properties the Bank’s financial policy committee (FPC) warned.
“Buy-to-let mortgage lending has the potential to amplify the housing and credit cycles,” the FPC said.
A set of data published by the Bank shows buy-to-let mortgage lending has increased by over 40 per cent since 2008, while owner-occupier lending rose by only two per cent. Meanwhile, the Bank also raised concerns that UK banks are at risk from the Chinese slowdown.