The move fulfils a pledge made by Chancellor George Osborne in his 2014 Mansion House speech, when he stated his commitment to ensuring that the FPC has ‘all the weapons it needs to guard against risks in the housing market’, and announced his intention to give the FPC ‘new powers over mortgages, including over the size of mortgage loans as a share of family incomes or the value of the house’.

The current consultation looks at the FPC’s powers of direction relating to loan-to-value ratio (LTV) limits and debt-to-income (DTI) ratios, including interest coverage ratios (ICRs) in respect of BTL lending.

It aims to gather views on how the operation of the UK BTL mortgage market may carry risks to financial stability. It also seeks respondents’ opinions on the specific tools in relation to which the FPC has recommended it be granted powers of direction, including in their impact on business activity and prosperity; on the draft legislation; and on the consultation stage impact assessment.