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Posted on July 16th 2015 by admin-movingin

Call for Bank to intervene in buy-to-let market ‘as soon as possible’

A Tory MP has called for the Bank of England’s Financial Policy Comittee to intervene in buy-to-let “as soon as possible”.

Treasury Select Committee member Chris Philp said that action was necessary to stop buy-to-let adding “fuel to the flames of house price inflation”.

He was speaking as Bank of England governor Mark Carney appeared before the committee.

Carney said that the Treasury has already committed to a consultation with the Bank’s Financial Policy Committee on its recommendation to be given power to change buy-to-let lending policy, should the sector pose a risk to the overall housing market’s stability.

But Paul Smee, director general of the Council of Mortgage Lenders, yesterday said that buy-to-let was being falsely cast as the villain of the housing market.

He said the real problem was housing supply and that buy-to-let may be “taking too much of the rap for a wider policy failure”.

He said that the current government’s rhetoric is all about home ownership.

Smee said: “Achieving home ownership may get marginally easier, but it won’t suddenly become easy. A lot of people are going to be renting – by choice or by necessity – for as far ahead as we can realistically look.

“And, let us not forget, there are huge swathes of the population for whom private renting is an active choice, not a ‘second best’.

“The private rented sector – and, within it, buy-to-let – is an entirely normal part of the market.

“The relative size and popularity of the buy-to-let market will ebb and flow under different market conditions, just as the flow of lending to owner occupiers will.”

Smee said the physical supply of housing was the crucial factor, and that it was wrong to pit home ownership against buy-to-let “in some sort of artificially drawn battle line”.

He added: “Both tenures – along with social renting – are important.

“When it comes to housing tenure choice, there are no saints and sinners: the name of the game needs to be peaceful co-existence.”