BUY-TO-LET mortgages could be the next financial product to face tough new limits, the Bank of
A housing boom and bust could hit landlords just as it would any other home owner, risking a serious blow to banks and the financial system.
And it is stopping lenders from giving out too many risky loans - from this autumn, no more than 15 per cent of new loans can be offered at more than 4.5 times the borrower's income. But those only address some market risks.
"The FPC considered the need to monitor mortgage lending activity beyond the scope of the recommendation to ensure that financial stability risks did not shift to other lending institutions or forms of lending," said the FPC's minutes, published yesterday.
"This included close monitoring of the buy-to-let market, which would not be directly affected by this recommendation but where there was scope for financial stability risks to arise from increases in borrower indebtedness."
The committee is headed by
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