Regulations

Buy To Let Regulations

There have been calls for the Treasury to regulate the buy to let mortgage market over the last few months and a recent survey claims that 90% of lenders want this market regulated. With a figure as high as this it is worth finding out why lenders want this to happen.

It is considered it may be that lenders are not comfortable with the fact that the buy to let sector is not within the Financial Standards Authority regulations.

Lenders who deal with regulated mortgages as well as buy to let mortgages expect the same controls to cover all lending aspects.

For those dealing with buy to let products only, do not come under the Financial Standards Authority jurisdiction and questions that arise are; would lenders have to take responsibility should a problem arise, how would it be solved should a problem arise and would it be easier if regulations went across the board.

With so many buy to let lenders already regulated it is unlikely to cause much upheaval.

Buy to let investments may be commercial transactions but they are becoming a mainstream option and this should mean that protection should be regulated. These regulations were designed for the ordinary consumer but as many are now landlords surely they warrant the same Financial Standards Authority protection as other borrowers.

The Treasury’s actions are unknown but they are probably going to review the matter in the short rather than long term.