BofE share concerns of BTL over-exposure

The Bank of England's has warned that the booming buy-to-let market poses a threat to the UK's financial stability.

In the BofE's biannual Financial Stability Report for July 2015 it highlights the bank describes -

"Looser lending standards in the buy-to-let sector could contribute to general house price increases and a broader increase in household indebtedness"

The bank is concerned that any downswing in the economy could cause a flood of BTL property onto the sales market, that in an "illiquid market" could empower a property crash.

The bank's concerns will only be exacerbated by the looming increase of UK interest rates.

The bank stated its concerns -

"Buy-to-let borrowers are potentially more vulnerable to rising interest rates because loans are more likely to be interest-only and extended on floating-rate terms, and affordability tends to be tested at lower stressed interest rates than owner-occupied lending."

Download the Bank of England's Financial Stability Report for July 2015

Watch Mark Carney give his assessment ...





More on the B of E report -

The Telegraph - BTL could threaten UK economy

Could buy-to-let boom be burst by the Bank of England? http://t.co/eftyqNfSVT

— This is Money (@thisismoney) July 2, 2015

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