July 22, 2009
Buy To Let Regulation - Wanted?
In a recent poll of 550 mortgage brokers, 54 per cent of respondents said they would like to see buy-to-let regulated by the Financial Services Authority (FSA)…
Research from mortgage specialist, Exact, also revealed that 63 per cent of brokers questioned estimated that over 75 per cent of their buy-to-let clients were amateur investors.
For two out of five respondents, the per centage soared to over 90 per cent amateur landlords.
Exact's Managing Director, Alan Cleary, is of the opinion that the ready mortgage finance and credit that existed until 2007 made it too easy for amateurs "without a commercial head on their shoulders" to enter the market.
He adds: "It was a mistake to assume that because buy-to-let was viewed as a commercial endeavour, it could be left unregulated. The number of amateurs landlords in the private rented sector with sizeable portfolios now well under water is proof of the fact."
The firm has assessed the credit quality of more than 4 billion pounds of specialist loans and says the study suggest a large proportion of arrears are caused by "relatively few" buy-to-let investors who acted unwisely at the height of the market.
Where landlord arrears exist tenants can be in danger of eviction and it can be argued that the lack of regulation has made it more difficult to protect tenants in cases of repossession.
The FSA has already declared its intention to review regulation of buy-to-let but Mr Cleary suggests there is nothing to review, rather a need to correct mistakes.
Source: www.homemove.co.uk
