In May we reported how Banks were filling their boots with Buy to Let mortgages. Well, it seems the Bank of England has finally woken up to what is going on:-
“The Committee noted the continued growth of buy-to-let mortgage lending, with these loans now accounting for 15% of the stock of outstanding mortgages and nearly 20% of the flow of new mortgage lending…and the number of buy-to-let products at a loan to value ratio above 80% was 50% higher than 18 months ago.
The Committee noted that its actions to insure against future risks applied only to the owner-occupied segment of the housing market and, given this asymmetry, it was possible for risks to financial stability to be transferred to the buy-to-let segment”
This roughly translates as “Oh dear, we stopped the Banks from risky lending to people who want to buy their own home but they’ve simply switched to even riskier lending to buy to let investors”.
In all likelihood the BoE will have to tell Banks that there must be tighter LTV and Loan to Rental requirements for BTL. Until then the market will remain skewed in favour of Investors and against First Time Buyers/ Second Steppers.
Andrew oversees the Firm’s Quality Systems and is committed to making sure that our client’s receive the very best customer care and attention along with the best marketing and legal advice in the area.