Global officials at the Basel Committee , which sets global financial standards, plan to crack down on buy-to-let loans amid fears of instability following a boom in the market. The Basel Committee wants to hold twice as much capital against mortgages when the repayments are dependent on income from tenants. This move comes after Chancellor George Osborne introduced a new tax on landlords. the Basel Committee rules state that banks have to apply a between 60% and 85% risk weight to residential mortgage loans with a loan-to-value ratio of 70% . The Basel Committee’s tougher rules will also apply to businesses as “commercial real estate lending is a recurring source of troubled assets in the banking industry,” the proposal document said. The new plan would double that weighting to 35% if the loan is dependent on rental income.
Global officials at the Basel Committee , which sets global financial standards, plan to crack down on buy-to-let loans amid fears of instability following a boom in the market. The Basel Committee wants to hold twice as much capital against mortgages when the repayments are dependent on income from tenants. This move comes after Chancellor George Osborne introduced a new tax on landlords. the Basel Committee rules state that banks have to apply a between 60% and 85% risk weight to residential mortgage loans with a loan-to-value ratio of 70% . The new plan would double that weighting to 35% if the loan is dependent on rental income.