A seven-year buy-to-let boom has left the UK economy more at risk to a future recession – and could even spark a house price crash, the Bank of England warned today.
The Bank’s Financial Policy Committee, led by Governor Mark Carney, warned that landlords could be ‘disproportionately vulnerable’ to large falls in house prices and could make any property downturn even worse.
Buy-to-let mortgage lending has risen by 40 per cent since 2008 – 20 times faster than ordinary loans. In the same period, the buy-to-let share of the whole market has risen from 12 per cent to 16 per cent.
The Bank said this could push up house prices further, forcing people to take out bigger loans fuelling greater household debt.
If landlords see their loan repayments overtaking any rental income they can generate, many will respond by selling their property – potentially accelerating a downturn in the property market.
Read the Full Article: Source – Daily Mail
Time For Truth: (Daily Mail) – Britain’s buy-to-let boom is a growing risk to the economy and could spark a house price crash, Bank of England warns