Help To Buy Will Just Hinder Efforts To Solve The Housing Crisis

We shouldn’t be surprised that both the Treasury and the Bank of England are increasingly concerned about the burgeoning growth in buy to let. In the summer budget, the chancellor limited some of the tax deductions landlords can claim, with the aim of levelling the playing field with owner-occupiers; and in the autumn statement, he clobbered buy to letters – and second home owners – with a 3% stamp duty surcharge. Meanwhile, the Bank’s financial policy committee, which has the job of preventing a future crash, worries that buy-to-let landlords could bail out quickly in case of trouble, and are more at risk if interest rates rise. So the FPC announced that it may turn its new “macroprudential” tools on the sector. Governor Mark Carney has made it clear that he sees these new powers, which are meant to allow it to rein in lending in specific pockets of the economy without clobbering growth, as the first line of defence against a housing bubble. Read more on the Observer website.