A new phase for UK buy-to-let investment

Permalink: A new phase for UK buy-to-let investment
by Gill Montia

Proposals for the Financial Services Authority (FSA) to regulate buy-to-let lending have been welcomed by Assetz, which has declared the UK is entering a new phase for buy-to-let investment.

According to the property specialist, many investors who entered the market during the boom years, hoping to achieve short-term capital growth, have now left.

The change paves the way for a new type of property investor, taking a long-term view, and Assetz is calling for the FSA to regulate funding for property investment as a whole in the UK.

The firm maintains such a move would “prevent the widespread mis-selling that has taken place in recent years, ensure risks are properly disclosed to investors and control the marketing activities of agents and developers”.

Assetz also suggests that regulation on its own will not be enough and should be accompanied by “a comprehensive training course”.

Chief executive, Stuart Law, comments: “Buy-to-let mortgage regulation could well stop speculators with no money entering the buy-to-let investment market and should also improve the transparency of individual transactions further.”

He adds: “Far from impeding the recovery of the market, taking away the speculative, higher risk transactions will improve the risk profile of the sector from a lender’s perspective.”

However, those less enthusiastic about buy-to-let mortgage regulation have voiced concerns that FSA intervention could hamper any recovery of the UK’s severely contract buy-to-let mortgage market.