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The buy-to-let sector continues to drive growth in the mortgage market. Greater competition in this sector has not to date led to a widespread deterioration in underwriting standards of UK banks. Nevertheless, strong growth in buy-to-let lending may have implications for financial stability. The FPC will monitor developments in buy-to-let activity closely following the tax changes to the buy-to-let market announced by the Chancellor in the Budget and Autumn Statement. The FPC supports the programme of work initiated by the PRA to review lenders’ underwriting standards. Prices in the UK commercial real estate (CRE) market have risen significantly and the funding of investments is becoming riskier, with growing use of leverage and strong inflows to open-ended funds. A severe downturn in the CRE market could reduce the ability of some firms to access bank finance, given their use of commercial real estate as collateral . Housing market risks Housing market activity is pic...