With a spike in buy-to-let activity in recent years, the Bank of England (BoE) is reported to be keeping an eye on this part of the mortgage market.
The increase in this sector has largely been from small landlords purchasing a property for rental, to subsidise their income, or as a retirement investment. The Finance Policy Committee are aware of rapid growth and the impact it could have on delicate balance of the property market and subsequently, the economy.
Keeping a close eye
Policymakers at BoE have buy-to-let, as well as financial market liquidity, on their radar.
In the last three months, risks to the progress made in stabilising the UK economy has risen due to activity within China and other emerging markets, but the Financial Policy Committee (FPC) also commented that the resilience of British banks had improved, still leaving a challenging outlook.
“Overall… the outlook remains challenging. While the resilience of the financial system has continued to improve, downside risks have risen.” FPC
The FPC judged that it was not necessary to change regulations in the buy-to-let mortgage market just yet, however the growth in this sector along with developments in underwriting standards would continue to be monitored.
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