Bank of England claim that buy to let ‘risks economic stability’

New warning from the Bank of England

There is a new warning from the Bank of England suggesting that – despite all the recent measures aimed against buy to let investors – the sector “could pose a risk to broader UK financial stability.”

One year ago the BoE’s Financial Stability Report warned against the relaxation of lending criteria being offered by mortgage companies, such as reducing the size of deposits or income requirements for buy to let investors.

At that time the Bank said in its FSR document that: “The committee remains alert to the rapid growth of the UK buy-to-let market, and potential developments in underwriting standards as the sector could pose a risk to broader financial stability.”

Since then there has been a string of fiscal measures to recover more revenue from the private rented sector and a recent setting out – by the Bank of England itself – of new ‘stress test’ powers given to it by the Treasury to control borrowing to increasingly ‘safe’ investors who were in a position to put down large deposits, in particular.

However, this still appears not to have assuaged the doubts of those compiling the Bank’s Financial Stability Report; this year’s document contains another warning.


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Written by: Houseladder