Its been suggested that banks are again recklessly offering large loans without taking the borrowers affordability to make repayments should rates rise and the market wobbles.
Comments echoed those of Bank of England deputy governor Sir Jon Cunliffe who yesterday warned that a rise in interest rates, higher taxes or a fall in house prices could push some landlords to sell their properties. He fears this would send house prices down, posing a risk to financial instability among some banks. “There is an increasing amount of the housing stock owned by buy-to-let landlords. The question is, how do they behave if they cannot cover their interest payments because rates go up or because of tax changes?” he said at a House of Lords committee hearing on the housing market. “There could be risks to financial stability because it starts a spiral of house price declines," he said, which could undermine the banks which have made risky loans