Buy-to-let lenders subject to new regulation

Just when it looked as if things couldn’t get any worse for prospective buy-to-let investors – in particular the gradual withdrawal of higher rate tax relief for finance charges – the Bank of England’s Financial Policy Committee (FPC) will be granted new powers by the government to help it protect the financial system from future risks in the buy-to-let mortgage market.

The FPC is responsible for identifying, monitoring and taking action to remove or reduce systemic risks in the financial system. The new powers of direction will enhance the FPC’s existing macro-prudential toolkit - the tools it has at its disposal to head off potential threats to financial stability should they arise.

From early 2017, the FPC will be able to direct the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) to require regulated lenders to place limits on buy-to-let mortgage lending in relation to:

  • loan-to-value (LTV) ratios
  • interest coverage ratios (ICRs)

It follows the FPC recommending that it be given additional powers of direction over both the residential mortgage lending market and the buy-to-let mortgage market in September 2014. The government granted the FPC powers over the residential mortgage lending market in April 2015. The government consulted on the FPC’s recommended powers relating to the buy-to-let market from 17 December 2015 to 11 March 2016.

The consultation noted the positive impact of buy-to-let landlords in the economy, and the role they play in widening and balancing the overall housing market. They provide good quality accommodation for those who cannot at this point afford to buy a home, or who do not wish to commit to home ownership for personal or employment reasons. At the same time, the consultation set out the financial stability risks that buy-to-let lending may pose and how the FPC’s recommended tools would address these risks and ensure long-term economic stability.

The Chancellor of the Exchequer, Philip Hammond, said:

It is crucial that Britain’s independent regulators have the tools they need to keep our financial system as safe as possible.

Expanding the number of tools at the Financial Policy Committee’s disposal will ensure that the buy-to-let sector can continue to make an important contribution to our economy, while allowing the regulator to address any potential risks to financial stability.

 

Taxing dividends 22/10/2018

What is in a name? 22/10/2018

Not so trivial 01/10/2018

Powers of attorney 24/09/2018

Cash is king 24/09/2018

What’s in a name 23/07/2018

Advance notice 09/07/2018

Borderline benefits 16/04/2018

Room to breathe 30/10/2017

Pension scams 29/08/2017

Saving to pay tax 07/08/2017

Oh what a night 12/06/2017

Damage limitation 15/05/2017

One week to go! 27/03/2017

Marriage Allowance 27/02/2017

Lifetime ISAs 20/02/2017

10% corporation tax 24/10/2016

Going digital 22/08/2016

Buy-to-let red tape 15/08/2016

Tax-free Childcare 01/08/2016

Business as usual? 11/07/2016

What’s next? 27/06/2016

In or out 20/06/2016

Cycle to work 30/05/2016

Savings and tax 25/04/2016

Introduction 18/04/2016

The Panama Papers 11/04/2016

The Google enquiry 15/02/2016

Income alerts 01/02/2016

Flood relief 01/02/2016

Wasted opportunity 25/01/2016

Personal tax changes confirmed Personal tax changes confirmed

Pension changes 26/10/2015

Tax gap narrows 26/10/2015

Early bird filing 12/10/2015

More of the same 12/05/2015

Emergency tax codes 13/04/2015

Payment in 30 days? 02/03/2015

Tax avoiders beware 02/02/2015

This web site is operated by Adams Root & Associates Ltd (The Firm) a company registered in England. These terms and conditions ('the Terms') govern your use of this website (the 'Website').

Please read through the Terms. If you do not agree with the Terms, do not use this Website. If you do use the Website, your conduct indicates that you agree to be bound by the Terms.

Copyright notices

Unless otherwise specified the copyright in the contents of all the pages in this Website are owned by, or licensed to, the Firm.

Unless otherwise specified, the authors of the literary and artistic works in the pages in this Website have asserted their moral right pursuant to Section 77 of the Copyright Designs and Patents Act 1988 to be identified as the author of those works.

Conditions of your use of this Website

Except as stated below, the contents of this Website may not be copied, reproduced, distributed, republished, downloaded, displayed, posted or transmitted in any form or by any means without the prior express written permission of The Firm. You may not distribute, display or copy any of the contents of the pages contained in this Website to third parties including, but not limited to 'caching' any material on this Website for access by third parties and 'mirroring' any material on this Website.

You may print or download to disk the contents of individual pages of this Website for the purpose of private and personal non-commercial use. You may also permit your computer to make an electronically stored, transient copy of the content in this Website for the purpose of viewing it while connected to the Internet only. However, you may only make one copy of any content.

Warnings and Disclaimers

The Firm has used reasonable care and skill in assembling the information in this Website. However information or advice in the unrestricted areas of the Website cannot be tailored to personal circumstances or particular situations. There may also be factors relevant to you which fall outside the scope of the content of this Website. Accordingly, the material on this Website does not constitute personal advice. You should not rely solely on any material in this Website to make (or refrain from making) any decision or take (or refrain from taking) any action.

Legislation changes frequently and any material in this Website should not be relied upon after the date on which it is accessed.

The information contained in the material in the unrestricted areas of this Website is only for information purposes. The Firm by permitting the use of this Website, does not hold itself out as providing any accounting or legal advice. It also does not make any recommendation or endorsement as to any advisor or other service or product or to any material submitted by third parties or linked to this Website.

Any references in this Website to taxes and duties of any sort (including National Insurance Contributions) refer only to such taxes and duties as apply nationally throughout mainland England, Scotland and Wales.

Exclusion of liability

The pages contained in this Website may contain technical inaccuracies and typographical errors. The information in these pages will be updated from time to time but may at times be out of date. The Firm will use its best endeavours to reflect legislative changes within 90 days of such legislation coming into force. The Firm can however accept no legal responsibility for keeping the information in these pages up to date, or liability for any failure to do so.

The Firm does not make any warranty or representation as to the accuracy, completeness or fitness for purpose of any material on this Website or the reliability of the access to this Website.

In no event do The Firm accept liability of any description, including liability for negligence (except for personal injury or death), for any damages or losses (including, without limitation, loss of business, revenue, profits, or consequential loss) whatsoever resulting from use of or inability to use this Website. The Firm makes no warranty that this Website (or websites which are linked to this Website) is free from computer viruses or any other malicious or impairing computer program.

Other's advertisements

This Website may contain material submitted and created by third parties. The Firm excludes all liability for any illegality arising from or error, omission or inaccuracy in such material.

This Website also contains links to other websites which are not under the control of and are not maintained by The Firm. The Firm is not responsible for the content of those sites. The Firm provides these links for your convenience only but does not necessarily endorse the material on these sites. The Firm makes no warranty or representation as to the accuracy, completeness or fitness for purpose of any material on these sites. You proceed to these websites at your own risk.

Data Protection and Privacy

Any details which you provide to us from which The Firm can identify you are held and processed in accordance with our Data Protection Registration.

Law governing the Terms

Use of this Website and these Terms shall be subject only to the laws of England and Wales which shall exclusively govern the interpretation, application and effect of all the above permissions, exclusions, licences and conditions of use.

Jurisdiction

The Courts of England and Wales shall have exclusive jurisdiction over all claims or disputes arising in relation to, out of or in connection with this Website and its use and these Terms.

Where national regulatory authorities have jurisdiction over the contents of this Website, The Firm has attempted to ensure compliance with the requirements of such regulatory body. However, some of the information in the pages contained in this Website is not to be accessed from certain jurisdictions and no representation or warranty is made as to whether the information available in this Website complies with the regulatory regime of countries from which the pages in this Website should not be accessed.

Adams Root & Associates is the trading name of Adams Root & Associates Ltd, 86 Shirehampton Road, Stoke Bishop, Bristol, BS9 2DR.

Adams Root & Associates Ltd is committed to protecting your privacy.

Information given through our web site forms is used solely to service you with information or further actions as requested. It will not be passed on or sold to third parties.

Standard web server logs are kept, recording basic information for statistical analysis, such as page views, referrer sites etc, and highlighting any malicious behaviour attempts.

“This website uses Google Analytics, a web analytics service provided by Google, Inc. (“Google”).  Google Analytics uses “cookies”, which are text files placed on your computer, to help the website analyze how users use the site. The information generated by the cookie about your use of the website (including your IP address) will be transmitted to and stored by Google on servers in the United States . Google will use this information for the purpose of evaluating your use of the website, compiling reports on website activity for website operators and providing other services relating to website activity and internet usage.  Google may also transfer this information to third parties where required to do so by law, or where such third parties process the information on Google's behalf. Google will not associate your IP address with any other data held by Google.  You may refuse the use of cookies by selecting the appropriate settings on your browser, however please note that if you do this you may not be able to use the full functionality of this website.  By using this website, you consent to the processing of data about you by Google in the manner and for the purposes set out above.”

No other browser cookies are used on this site.

For administrators of the website browser cookies are used allowing access to private pages requiring a user authentication.