If you think buy to let escaped lightly in the additional mortgage restrictions announced last week by Bank of England governor Mark Carney, then think again.
Little reported by the mainstream press, the Prudential Regulation Authority head Andrew Bailey announced at the same time that BTL was not being ignored.
"We are looking across the whole market for signs of stress. You can be assured we will be monitoring it" he says. Bailey says stability in the BTL will be scrutinised through the
the market stress tests announced earlier this year, including calculating lenders' risks in the event of interest rate rises and wider economic problems.
Lenders' balance sheets have to be able to withstand a 35 per cent drop in house prices and a bank base rate rise to four per cent.
Bailey says the income-multiple cap - where each major lender must limit the proportion of new mortgages that are 4.5 times income or greater, to under 15 per cent of its total mortgages - would not be appropriate to apply to BTL because what he called the income dynamic for landlords was different to that which applies to owner occupier borrowers.