BoE to be granted new pow­ers over land­lords

The Pak Banker - - COMPANIES/BOSS -

The Bank of Eng­land could be granted new pow­ers to curb growth in the "bub­ble" like buyto-let hous­ing mar­ket, Ge­orge Os­borne, the Chan­cel­lor, has said. Ad­dress­ing 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. The new pow­ers could al­low the Bank of Eng­land's FPC to hit land­lords with ex­tra re­stric­tions as soon as this year.

"It's very likely we will give pow­ers to the FPC over the buyto-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. The mea­sure is ex­pected to raise £3.8bn in taxes over the course of this par­lia­ment, ac­cord­ing to the Of­fice for Bud­get Re­spon­si­bil­ity (OBR). "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 10-mem­ber FPC is due to re­lease an as­sess­ment of un­der­writ­ing stan­dards for buyto-let bor­row­ers next week. Last year, the FPC - which is led by Bank gover­nor Mark Car­ney - rec­om­mended that it is granted tougher pow­ers over the buy-to­let mar­kets in or­der to pre­vent a build-up of risks to the fi­nan­cial sys­tem.

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