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FPC to get more powers over buy-to-let in 2017

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The Bank of England’s Financial Policy Committee will get new powers to help it protect the financial system from future risks in the buy-to-let market next year, according to HM Treasury.

From early 2017 the FPC can order the Prudential Regulation Authority and Financial Conduct Authority to get lenders to place limits on buy-to-let mortgage lending in relation to loan-to-value and interest coverage ratios.

The Treasury announcement follows the FPC asking for extra powers over the residential mortgage market and the buy-to-let mortgage market in September 2014.

The government granted the FPC powers over the residential mortgage lending market in April 2015.

The government then consulted on the FPC’s recommended powers relating to the buy-to-let market from 17 December 2015 to 11 March 2016.

Chancellor of the Exchequer Philip Hammond says: “It is crucial that Britain’s independent regulators have the tools they need to keep our financial system as safe as possible.

“Expanding the number of tools at the Financial Policy Committee’s disposal will ensure that the buy-to-let sector can continue to make an important contribution to our economy, while allowing the regulator to address any potential risks to financial stability.”

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  • Michael White 17th November 2016 at 10:54 am

    Further BTL intervention is seemingly based On the assumption that the majority of borrowers are fools and most lenders incompetent? The hyperbole is all very amusing.

  • Samantha Cox 16th November 2016 at 6:17 pm

    Am i the only one who feels B2L has totally dominated this year? i spent the first quarter in a state of permanent stress getting everyone’s LTB and last minute purchases through before the Stamp Duty Deadline, then since April there has been a steady tightening in criteria, not to mention having to look at the potential future Tax Liability and discuss this with clients, and now i have a swathe of landlords who’s deals are ending soon and we are in a panic to get re-mortgages through before the final rental calculation changes take effect. All this has amounted to heaps of additional work and not much in the way of additional revenue. Still i suppose i can put my feet up next year, as B2L is now well and truly dead, and i can’t see how further involvement from the FPC is going to change that. I just hope they can put some sensible procedures in place for existing Landlords, as in the area i work, they are seriously in danger of becoming Mortgage Prisoners.