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Mortgage chief tells Bank of England to back off Buy To Let
The head of the Intermediary Mortgage Lenders Association is telling the Bank of England to back away from its strident warnings about the risk of the buy to let market imploding.
In last week’s Financial Stability Report, the Bank warned BTL could pose a threat to the UK economy, especially with the possibility of more pensioners using their ‘pension freedom’ to dive into the private landlord world.
But IMLA director John Herton says buy-to-let lending peaked at £45.7 billion in 2007 but even after the recent recovery in the housing and financial markets, it is expected to hit only £30 billion this year.
“The Bank of England’s comments on buy-to-let 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” says Heron.
“The rising cost of homeownership is among many factors driving demand for rental properties, including the fall in social housing, changing work patterns, growing numbers of students, high levels of immigration, later marriage and rising separation rates” he says
”Housing needs are changing and, in fact, IMLA analysis shows fewer than one in three extra properties to enter the private rental sector since 2007 have been backed by a buy-to-let mortgage. Lending has therefore been responding to rather than leading demand.”
