The Chancellor to grant Bank of England powers to curb growth in the buy-to-let bubble
George Osborne The Chancellor has stated he could give the Bank of England new powers to curb the buy-to-let bubble with extra restrictions on Landlords being implemented as early as this year.
In a statement to MPs Mr Osborne said it was “very likely” the Government would allow the Financial Policy Committee – which guards against risks to financial stability – to take direct action to regulate the property market.
“It’s very likely we will give powers to the FPC over the buy-to-let market,” Mr Osborne told the Treasury Select Committee.
The Chancellor has already imposed a new 3pc stamp duty “surcharge” on buy-to-let properties and second homes which is due to come into force next month in April. This will raise an extra £3.8bn in taxes over the next 5 years.
“The measures I have taken in the last couple of fiscal events – on additional stamp duty, on changes to mortgage interest relief – have been done in the knowledge the Bank of England has concerns about a bubble emerging in this market”, said Mr Osborne.
“The Bank of England and the Financial Policy Committee have identified potential systemic risks in the large increase in the buy-to-let market”, said the Chancellor.
Extra tax with the removal of tax relief on interest payments will be impacting landlords from next year.