Market News
60% of landlords favour BTL regulation
09/03/2010
Nearly 60 per cent of landlords favour proposals to regulate buy-to-let mortgage lending, believing it will provide additional protection for landlords looking for investment finance. Landlords are also in favour of regulating advice provided by intermediaries and introducers on buy-to-let loans, with 59 per cent saying it will help root out unscrupulous introducers and intermediaries.
The survey showed the majority of landlords support stronger regulation of buy-to-let mortgages and advice, although LSL Property Services, which owns the UK's largest lettings agent network, said the Treasury and FSA must resist the temptation to impose "one size fits all" regulation.
LSL spokesman David Brown said: “It may be surprising that many landlords advocate further regulation, but this does reflect a general desire for additional investor protection, and if it leads to a greater professionalisation of the sector, it should be applauded.”
But while they support regulation to protect the inexperienced, 55 per cent of landlords with seven or more years’ experience are opposed to the regulation of mortgage products, arguing that they don’t need the additional administrative burden.
Brown said: “The majority of experienced property investors do not necessarily need nor want the added protection or burden of increased regulation. Most are able to secure their own finance and are skilful at managing brokers and lenders to obtain the products they need. Long established portfolio landlords are less likely to benefit from tighter regulation. Indeed, they see a real risk that disproportionate regulation may make force more lenders and brokers from the sector, exacerbating the current shortage of buy-to-let mortgage finance.”
He added: “Increased regulation would potentially help less experienced landlords, but it needs to be simple and proportionate. The FSA and the Treasury should avoid using a sledgehammer to crack a nut. Landlords have different levels of experience, and different requirements. With a one size fits all approach to regulation, any benefit for inexperienced investors could potentially be outweighed by the damage to the sector if it ended up making it less attractive for larger scale landlords to invest.”