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Imla: Full regulation of buy-to-let is ‘inevitable’


The buy-to-let market will have conduct regulation forced upon it in the future, according to Intermediary Mortgage Lenders Association executive director Peter Williams.

In the latest Mortgage Strategy Wired television debate – Buy-to-let in the Crosshairs – the question was raised as to whether the sector would ever become fully regulated.

Policymakers have shone a light on buy-to-let in recent months, with the Treasury due to consult on giving the Financial Policy Committee the power to contain the sector, possibly through LTV and debt-to-income caps.

Moreover, from March, consumer buy-to-let, estimated to account for around 11 per cent of the market, will become regulated as part of the Mortgage Credit Directive.

When asked if the buy-to-let sector would ever become fully regulated, Williams said: “I believe so. Inevitably.

“I think there is a mixture of views; there are arguments in favour of it. I think the drive will continue in that direction… we will see it in the fullness of time. There will be a mixture of views about whether that’s a good thing or a bad thing.

“There is quite a lot of misunder­standing about the buy-to-let market. For example, it has grown particularly rapidly but what has grown is remortgaging activity; it is not necessarily new mortgages.

“It isn’t as big as it looks because the buying element is quite constrained still.”

OneSavings Bank sales and marketing director John Eastgate agreed that full regulation was on its way, and welcomed it.

He said: “What we all want is a stable market for the long term.”

Vanessa Warwick, who co-founded the online landlord community Property Tribes, said many smaller land­lords were unaware of their responsibilities and regulation would change that.

She said: “The small landlord perhaps isn’t as informed as they should be and I think this is one of the issues we need to address in the sector: improving standards and helping educate landlords as to their responsibilities and their legal and compliance responsibilities.

“There are actually 100 gov­ernment statutes and regulations that we as landlords have to adhere to and I think there is a severe lack of awareness of that among landlords.

“I would actually welcome regu­lation of the buy-to-let mortgage sector because I think, in the past, it has been a bit free and easy. I think that is very much to blame for anti-landlord sentiment.”

Separately, Warwick labelled the change to buy-to-let tax relief announced in the summer Budget a “tax on tenants”.

The Government will begin tapering down tax relief for buy-to-let borrowers to the basic rate of tax from April 2017.

Warwick added: “My personal belief is that the Government wants to largely rid the private rented sector of landlords and pave the way for institutional investors. The ways to do that is to adjust things so that it doesn’t look as favourable to get involved, to deter people from investing.

“I ultimately believe this will be passed on to tenants because there will be fewer landlords investing, less rental stock to choose from and the landlords that do remain in the sector are just simply going to put up their rents according to the tax changes.”


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  • Chris Hulme 13th October 2015 at 11:03 am

    This wouldn’t be any surprise at all as regulators try to step in to control the housing market as a whole and all its participants. Could we begin to see BTL Mortgage Prisoners on the horizon?
    This does open up the likelihood whereby BTL that doesn’t then fit that regulated mould then seeks alternative sources of finance and wrappers through more commercial type arrangements.
    That deepening track between private individuals owning BTL and Ltd Co structures being employed could widen as the true commercial BTL element digresses away from the regulators grasp.