Landlords support FSA regulation of buy-to-let finance

Permalink: Landlords support FSA regulation of buy-to-let finance
by Gill Montia

Most of the UK’s landlords support stronger regulation of the buy-to-let lending sector, according to a survey conducted by LSL Property Services.

Buy-to-let loans have so far been excluded from Financial Services Authority (FSA) regulation because they have been seen as investment finance.

However, a study by the letting agents’ network suggests that 60% of landlords are actually in favour of further regulation, believing it will provide additional protection for property investors.

The exceptions come mainly among landlords with seven or more years’ experience, with 55% of this group saying they were opposed to FSA regulation of buy-to-let mortgage products.

LSL spokesman, David Brown, explains: “The majority of experienced property investors do not necessarily need nor want the added protection or burden of increased regulation.”

He adds: “”Indeed, they see a real risk that disproportionate regulation may force more lenders and brokers from the sector, exacerbating the current shortage of buy-to-let mortgage finance.”

The FSA is expected to extend its role later this year and Mr Brown is urging the regulator to introduce “simple and proportionate” measures and avoid “using a sledge-hammer to crack a nut”.

In other buy-to-let lending news, the Association of Residential Lettings Agents (ARLA) has recently launched ARLA Mortgages, an online comparison site aimed specifically at the buy-to-let borrower.