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TODAY'S OTHER NEWS


Bank should not ‘rush to judge’ buy to let

The Bank of England is facing criticism for recent comments which warned of the dangers to the UK economy of the growth in the buy-to-let sector.

Last week, the Bank said that the booming rental market posed a threat to the country’s financial stability because of the risk of overinvestment.

But the Intermediary Mortgage Lenders Association (IMLA) has accused Bank officials of making a “rush to judgement”.

The IMLA’s director, John Heron, said: “The Bank of England’s comments on BTL are based on their observation of strong growth in lending in recent years. It should be understood, however, that while there has been substantial growth, this has been from a low base post-crisis and lending today is still no greater than it was 10 years ago and is well below the levels achieved before the crisis in 2007.”

In its Financial Stability Report, published last week, the Bank said that “looser lending standards” in the buy-to-let sector could stoke property price increases as well as household debt.

However, Heron added: “So far we have seen no evidence of a glut of new BTL investors spurred on by the new pension freedoms. The size of the average pension pot and the tax implications of withdrawing large sums required for investment are likely to mean that any impact remains at the margins. We look forward to an open and frank debate on BTL growth but strongly urge against a rush to judgement.”

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