Possible cap on loans to BTL landlords
At present owner-occupiers are treated differently to would be landlords applying for loans, the Bank of England at present has powers to cap borrowing by owner-occupiers where it does not for landlords.
Officials are watching closely for lenders who are being too accommodating for would be landlords when it comes to satisfying criteria when applying for loans, the booming buy-to-let market is distorting the property market at present and The Bank of England (BOE) warns it could put the UK banking system at risk.
According to data from the BOE buy-to-let lending has icreased by 40% since 2008, where as owner occupier lending rose by only 2%. Further changes to the buy-to let as we have seen with tax changes to landlords and the continuous flow of new regulations that need to be met may see the exodus of landlords from the market, added to that a decrease in new landlords entering the market because of mortgage lending changes could see a dramatic reversal in house prices.