During a Treasury Select Committee this week, Osborne told members that the FPC would be granted powers on buy to let ‘as soon as possible’.
The announcement is somewhat a surprise after the FPC concluded only last month that there was no immediate case for action in the buy-to-let market.
Osborne has not confirmed the details of the powers that the FPC will be granted, but said there were ‘a number of tools’ the committee could employ.
IMLA executive director Peter Williams (pictured), said: “The government stated its intention earlier this year to hold a post-election consultation to assess the evidence for granting powers of direction over buy-to-let lending to the FPC. It was therefore very disappointing to hear the Chancellor apparently jump the gun at yesterday’s Treasury Select Committee. It suggests a stage of evidence-led policy making has been removed, and that the consultation may be limited to what those powers will be when – rather than if – they are granted.
“It seems somewhat ironic that this development comes just days after Mark Carney also spoke to the Select Committee about the need for a wider ‘stock take’ of financial regulations,” he said.
Williams added that it would be helpful for an open debate to take place, discussing the case for additional FPC powers based on the strength of the evidence available.
“Clearly there is a distinction between having powers and using them, but creating an evidence base to inform future FPC decisions is important and this process should continue. We must also hope the potential bias-towards-action does not exclude a sober appraisal of the facts even though the Chancellor seems to have jumped that hurdle.”
