CML urges against B2L regulation
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The Council of Mortgage Lenders has hit out at Treasury plans to regulate the buy-to-let sector, arguing that buy-to-let regulation will not lead to increased consumer protection.
In its formal response to the Treasury’s consultation on whether to extend the scope of mortgage regulation to buy-to-let, the trade body argues that buy-to-let regulation would capture an inappropriate range of commercial transactions.
The CML says it is also the wrong way to address concerns about systemic risks, which are more appropriately addressed through prudential rather than conduct of business regulation.
The CML’s response says: “Fundamentally, the CML still believes that buy-to-let loans are essentially commercial transactions with an investment dimension, and should not be subject to retail mortgage regulation.
“Inappropriate regulation could further damage buy-to-let lending, which has shrunk substantially in the last two years, at a time when the government is separately promoting investment opportunities in the private rental sector.
“Extending the FSA’s scope as proposed would undermine the government’s wider housing policy.”
Michael Coogan, director-general at the CML, says: “While we support some of the proposals to extend regulatory scope, the Treasury and the FSA need to tread carefully to avoid unintended negative consequences.
“As far as buy to let is concerned, the regulatory proposals are barking up the wrong tree - for amateur property investors, poor investment advice is the issue, not the mortgage.
“The Treasury recognises that regulation has in the past dampened incentives to invest in the private rental sector.
“The proposals to extend mortgage regulation designed to protect home-owners to the buy to let sector would simply repeat this mistake.”
Readers' comments (4)
Jon | 15 Feb 2010 4:13 pm
Then lets see the CML - and other IFA bodies - call for the investment advice for Buy to Let to be regulated.
There is a need for regulation, it is a question of what should be regulated and how.
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Anonymous | 16 Feb 2010 10:39 am
BTL has already become quasi regulated, you cannot get a BTL through a lender without the FSA number, so there you have it, the market sorted itself out!
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Vivienne Connery | 16 Feb 2010 11:23 am
totally agree, buy to let regulation would just dampen an already shrunken market in times when the government are just realising how important the private rental sector is.
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Anonymous | 16 Feb 2010 12:39 pm
This government have no idea how important the private rental sector is, just read the latest consulation document to prove that. One thing they want to bring in is a "rate your landlord" web site. They have no idea of the problems landlords have with tenants and would never ever approve a "rate your tenant" web site. This goverment are anti everything to do with business, private housing sector, financial services, the list goes on, as I have said before, they would regulate a fart if they could!
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