BoE to be granted new powers over landlords
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.