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Thursday, October 02, 2014

FPC ask for controls on lending ratios

The Bank of England’s Financial Policy Committee (FPC) have announced their recommendations for HM Treasury to grant them increased powers over the mortgage lending market.

The FPC want to be enabled to insist prescribed limits of lending by regulated lenders on residential mortgage lending, for both owner-occupied and buy-to-let, whenever they see fit.
These requested powers would include prescribing maximum Loan-to-Value Ratios and Debt-to-Income Ratios, including Interest Coverage Ratios in respect of buy-to-let lending.

The FPC is calling for these powers to enable them to tackle any future risks to the countries financial stability in relation to future booms in housing market.

The announcement underlines the increasing political risk to landlords

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