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Bank of England to be given powers to rein in buy-to-let
http://www.x404.co.uk/forum/viewtopic.php?f=19&t=24753		 Page 1 of 1
Author:  pcernie [ Fri Dec 18, 2015 12:01 am ]
Post subject:  Bank of England to be given powers to rein in buy-to-let
Bank of England to be given powers to rein in buy-to-let market | Money | The Guardian
http://www.theguardian.com/money/2015/d ... let-market

Quote:
It has not yet attempted to intervene in the buy-to-let market but wants to have the tools ready should it decide to act. Landlords tend to take out interest-only mortgages – 85% of new buy-to-let mortgages in the second quarter of 2015 were interest only, up from 77% in 2007 – and the Bank fears they may be more likely to sell up if they run into payment difficulties, potentially bringing a flood of properties on to the market in a short time.


In other words the problem is so bad that they're worried about prices falling rather than them being out of most peoples' chance at the moment.
Author:  hifidelity2 [ Fri Dec 18, 2015 12:22 pm ]
Post subject:  Re: Bank of England to be given powers to rein in buy-to-let
pcernie wrote:
Bank of England to be given powers to rein in buy-to-let market | Money | The Guardian
http://www.theguardian.com/money/2015/d ... let-market

Quote:
It has not yet attempted to intervene in the buy-to-let market but wants to have the tools ready should it decide to act. Landlords tend to take out interest-only mortgages – 85% of new buy-to-let mortgages in the second quarter of 2015 were interest only, up from 77% in 2007 – and the Bank fears they may be more likely to sell up if they run into payment difficulties, potentially bringing a flood of properties on to the market in a short time.


In other words the problem is so bad that they're worried about prices falling rather than them being out of most peoples' chance at the moment.

But the government has already removed the big incentive to haveing the interest only (Buy to let) mortgage - and that is the ability to off-set the interest (on the loan) against the tax
Author:  ShockWaffle [ Fri Dec 18, 2015 11:31 pm ]
Post subject:  Re: Bank of England to be given powers to rein in buy-to-let
This is an exercise in the fancy new science of Macroprudential regulation.

The point isn't to stop buy-to-let mortgages, or even to limit them most of the time. It is to limit them only at those times when the market is out of shape and the only alternative would be to meddle with interest rates.

Some might argue that it isn't a great plan because it requires central bankers to be godlike geniuses, and it lets politicians off the hook for failures to reform planning and zoning regulations. But it has some rationale in that the alternative distorts monetary policy to cover those same failings, which is probably worse.
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