A leading lending expert has criticised the proposal that all buy to let mortgages should come under the Financial Services Authority (FSA) for regulation.
The proposal came about recently from the British Property Federation whereby they claimed regulation of the buy to let mortgage market by the FSA would help bring reckless lending to an end, such as that level of lending that contributed to the housing market slump and credit crunch.
However, Managing Director David Whittaker of Mortgages for Businesses, a mortgage brokerage, has been quoted in the media as saying the plan needs to be far better thought out and as it stands is limited. Mr Whittaker commented:
“A couple of lenders have got bad loans on their books, but if you take a specialist lender like Paragon – who only lend on buy-to-let – their mortgage book is cleaner than any of the banks by any measurement.”
He also added that the regulation would be difficult to do as both financial advisors and estate agents themselves have their own interest in property investments.
It will be interesting to see where the recovering economy and proposed measures will take the mortgage market and mortgage advice market as a whole.
Buy to let mortgages are a large part of the CeMAP syllabus and indeed, landlords can be a huge proportion of the regular work that a mortgage advisor might deal with, particularly if they are self employed. Keeping up to date with this sort of changes, and indeed proposed changes, is important in your work as a mortgage advisor so your clients can see you keep yourself up to date and abreast of changes. There are different ways to do this and this is something we can advise you on.