The Bank of England has made a conclusion regarding a sector within the UK housing market after reviewing data which paints a startling picture. Lending has increased for buy to let properties by 40% since the year 2008, according to the Financial Stability Committee. The growth of this sector could possibly pose a serious threat to overall financial stability.

The committee commented on the data concerning the bulging sector, saying: "The FPC is alert to the rapid growth of the market and potential developments in underwriting standards.

"As the market continues to grow, particularly if driven by loosening of underwriting standards, the sector could pose risks to broader financial stability, both through credit risk to banks and the amplification of movements in the housing market."

The 40% increase is in stark comparison to just 2% growth of everyday owner occupied mortgage lending.

One factor could offset the bloated sector of buy to let. That factor is a drop in house prices. This is one of two possible ways to reverse the trend. The trend could also reverse if prices increase sharply.

The FPC continued with comments, saying: "Any increase in buy-to-let activity in an upswing could add further pressure to house prices. This could prompt owner-occupier buyers to take on even larger loans, thereby increasing overall risks to financial stability.”

The buy to let sector is growing at an exceptional rate which matches the pace of activity of remortgages currently. The increase in base rate is coming. Many house owners are choosing to remortgage now instead of waiting for the rates to increase from many lenders.