Is buy-to-let regulation the answer to the housing crisis?

 
Published by The Economic Voice on Monday, 02 March 2015 by Ben Gosling
 
In October 2014, the Bank of England requested the power to place limits on both buy-to-let and residential mortgage lending. By using so-called ‘powers of direction’, the Bank’s Financial Policy Committee (FPC) hoped to be able to direct financial sector regulators to place limits on loan-to-value and debt-to-income / interest coverage ratios granted by lenders [1].

The government released proposals to grant the FPC this legally enforceable power with respect to the residential market, but said that it would “consult separately” on the buy-to-let market in 2015 [2]. This month, it emerged that this consultation would likely not take place until after the general election [3].

What is the case for limiting buy-to-let lending? …


Tags: financial sector, FPC, government, mortgage, powers of direction

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