The results of the latest Bank of England Financial Stability Report indicate the buy to let sector is the driving force within the UK housing market currently. It also indicates the sector is more sensitive to fluctuations in the interest rate compared with the owner occupied sector. There is also a possibility that continued strong growth could lead to financial instability of the entire market.

Due to the possible issues connected with more growth of the buy to let sector, lending within the sector could be evaluated and subsequently placed under more control.

Existing landlords and those seeking to enter the sector as landlords are already facing an additional 3% in stamp duty from next April. There are also new changes concerning taxation on income.

The Financial Policy Committee commented on the report, saying: “The FPC remains alert to financial stability risks arising from rapid growth in buy to let mortgage lending and notes the difference in underwriting standards in the owner occupier and buy to let mortgage markets, in particular in the typical interest rates used in affordability stress tests.”

Steve Bolton of Platinum Property Partners feels more lending regulations could lead to the abolishment of the sector and that could help solve the housing crisis. He said: “However, it has been the severe lack of home building over the last decade that has got us into this situation in the first place. Trying to address this problem by attacking private landlords seems short sighted and another tax grab strategy.”