Mortgage professionals want BTL market regulated
Thursday, 16 July 2009 1:50 PM
Just over half of all mortgage brokers (54 per cent) want the Financial Services Authority (FSA) should regulate the buy-to-let (BTL) market, according to a survey from Exact mortgage experts.
Of the 549 mortgage brokers questioned 4 out of every 10 said at least 90 per cent of their BTL clients were amateur landlords.
Moreover the majority of brokers quizzed said that around 75 per cent of their BTL clients were amateur investors.
Alan Cleary, managing director of Exact mortgage experts, said the BTL market should always have been regulated by the FSA from the beginning of mortgage regulation in 2004. He also claimed the availability of mortgage products until two years ago opened the door for a lot of amateur investors who may not have been as aware of the dangers they faced if they overreached themselves in terms of their investments.
The number of BTL landlords with mortgage arrears are well above the market average according to official statistics. Exact suggests a large proportion of these arrears are caused by relatively few individuals who invested unwisely at the height of the property boom.
Mr Cleary said: "The lack of regulation meant it was too easy for amateurs without a commercial head on their shoulders to jump on the bandwagon. It was a mistake to assume that because BTL 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."
He added: "The lack of regulation in the [BTL] sector makes it much harder for the government to protect these people. The FSA has said it intends to review regulation of the buy to let sector - I would suggest there is nothing to be reviewed. Mistakes need to be corrected."
