“The Government stated its intention earlier this year to hold a post-election consultation to assess the evidence for granting powers of direction over buy to let lending to the Financial Policy Committee (FPC).¹ It was therefore very disappointing to hear the Chancellor apparently jump the gun at yesterday’s Treasury Select Committee. It suggests a stage of evidence-led policy making has been removed, and that the consultation may be limited to what those powers will be when – rather than if – they are granted.
“It seems somewhat ironic that this development comes just days after Mark Carney also spoke to the Select Committee about the need for a wider ‘stock take’ of financial regulations. There is a common interest in ensuring we have a stable market for buy to let, and we feel this would be aided by an open debate about the case for additional FPC powers based on the strength of evidence.
“The FPC itself recently judged was that there is ‘no immediate cause to take action in the buy to let market’.² Clearly there is a distinction between having powers and using them, but creating an evidence base to inform future FPC decisions is important and this process should continue. We must also hope the potential bias-towards-action does not exclude a sober appraisal of the facts even though the Chancellor seems to have jumped that hurdle.”
¹ HM Treasury, Detail of outcome for FPC’s housing market tools consultation, 2.43 January 2015
² Financial Policy Committee statement from its policy meeting, 23 September 2015
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Notes to Editors
The Intermediary Mortgage Lenders Association (IMLA) is the trade association that represents mortgage lenders who lend to UK consumers and businesses via the broker channel. Its membership of 44 banks, building societies and specialist lenders include 18 of the 20 largest UK mortgage lenders (measured by gross lending) and account for about 90% of mortgage lending (91.6% of balances and 92.8% of gross lending).
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