George Osborne has given the go-ahead for the Bank of England’s Financial Policy Committee to restrict the buy-to-let mortgage market.
The Treasury is to consult on the ability for the central bank to limit the size of landlords’ mortgages relative to the value of a property and to rental payments.
Paul Smee, CML director general, said: “We understand the rationale for putting the macroprudential tools at the Bank of England’s disposal, but also recognise that this does not necessarily mean they will be used. In our view, buy-to-let does not constitute a market that currently requires further macroprudential intervention, especially as the effect of several recent tax changes is yet to be fully felt and evaluated.
“We urge policymakers to be mindful of the risk of unintended consequences that could adversely affect the private rented sector, alongside their focus on ensuring that the buy-to-let market does not pose a threat to financial stability.”