Buy to let has an uncertain future thanks to tax and mortgage changes, according to mortgage professionals.

Landlords have come under attack from the Bank of England governor Mark Carney and Chancellor George Osborne, who both fear buy to let is undermining the property market.

Osborne is concerned wealthy landlords are outbidding first time buyers for affordable homes, while Carney is worried lenders are relaxing mortgage criteria too much.

To combat the growth of buy to let, which accounts for about 9% of all mortgage lending, Osborne has granted the Bank new powers to cap loan-to-value on borrowing and to order lenders to increase affordability criteria for landlords.

Although the Bank has the powers, they are not yet in use.

 “We have to be careful about buy to let and are watching closely and will step in and take action if we have to,” said Carney.

The Mortgage Works, Barclays Bank and several other lenders have already changed rent cover rules in an effort to make buy to let loans harder to get for landlords.

Both these measures have led the Council of Mortgage Lenders – the trade body for the majority of the UK’s buy to let lenders – to downgrade lending forecasts for the next two years.

Lenders say the sector has grown for the past five years, but is likely to standstill for the next two while landlords assess how the lending and tax changes affect their businesses.

 “Our view is buy to let is not a market that needs intervention, especially until the effect of recent tax changes is seen and evaluated,” said a CML spokesman.

“We think policy makers need to be careful about unintended consequences that may result from their actions and comments.”

From April 2017, landlords paying higher rate tax will have their mortgage interest relief restricted, lose travel expenses and see changes in the way they can reclaim the cost of furniture and white goods in their properties.

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