Bank of England to get powers to regulate buy-to-let mortgages
Reuters
Published Nov 16, 2016 17:07
Bank of England to get powers to regulate buy-to-let mortgages
LONDON (Reuters) - The Bank of England will receive the power early next year to regulate mortgages used by small landlords to purchase rental property, Britain's finance ministry said on Wednesday.
"The Bank of England's Financial Policy Committee (FPC) will be granted new powers by the government to help it protect the financial system from future risks in the buy-to-let mortgage market," the government said.
The BoE will be able to limit loan-to-value ratios on buy-to-let mortgages, as well as the minimum amount by which the expected rental income from a property must exceed mortgage interest payments.
The BoE had previously asked for these powers in 2014 - which are similar to ones it already has for residential mortgages - and the government held a public consultation about this in early 2016.
Buy-to-let properties have been a profitable investment over the past 20 years, but more recently they have become subject to less favourable tax rules and greater regulation, partly due to public concern they can crowd out first-time home-buyers.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.