Former Tory Chancellor Lord Lamont has warned that the current buy-to-let boom could end in tears once interest rates rise.
He said that the rapid boom in the market should not be a cause for unqualified celebration.
Buy-to-let lending to landlords hit £5bn in the past three months, but Lamont said he is concerned that the buy-to-let market had rebounded so quickly.
He warned that George Osborne should closely monitor developments.
Lamont, who was Chancellor under John Major, said: “The Bank and the Government need to keep a careful eye on the buy-to-let market. This is expanding very rapidly at the moment and it was an over-rapid expansion of it before that caused the demise of Bradford & Bingley.”
Lamont believes the Government and Bank of England risk creating a new property bubble.
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Comments
Lamont is wrong. Bradford and Bingley Buidling Society was solvent. It was the actions of that Pesto chap from the BBC and our much-missed (NOT) PM, gordon Brown that shafted them.
They had just re-financed from their shareholders and that was over-subscribed so hardly a vote of no confidence by the shareholders!