Article 3 Macro-prudential measures

The measures in paragraphs (2) and (3) are prescribed in relation to the FCA and PRA.

Where the Financial Policy Committee considers it proportionate on the basis of a cost-benefit analysis, a measure to require relevant regulated persons to ensure that, in relation to relevant buy-to-let mortgage contracts which are entered into after the date of the direction, no more than a specified proportion have a loan-to-value percentage greater than a specified maximum loan-to-value percentage.

Where the Financial Policy Committee considers it proportionate on the basis of a cost-benefit analysis, a measure to require relevant regulated persons to ensure that, in relation to relevant buy-to-let mortgage contracts which are entered into after the date of the direction, no more than a specified proportion have an interest coverage ratio less than a specified minimum interest coverage ratio.

In paragraphs (2) and (3), “specified” means specified by the Financial Policy Committee in a direction given under section 9H of the 1998 Act.

In paragraphs (2) and (3), references to “interest coverage ratio” and “loan-to-value percentage” are references to those matters as calculated by a lender when deciding whether to provide credit to a borrower.