Perils of B2L restrictions

In these turbulent times it is understandable that lenders are cautious about who they lend to, but there are mixed industry views about Cheltenham & Gloucester\'s criteria changes.

It will not lend to clients with more than three investment properties in Lloyds Banking Group or total mortgages worth more than £500,000. Many are worried about where this will end, fearing it could lead to further restrictions across the Lloyds Banking Group including at BM Solutions.

If BM Solutions clamped down many feel the game would be up for buy-to-let, and that would have a knock-on effect on the housing market and any possible economic recovery.

All this is no insult to Lloyds Banking Group. With all the troubles the lender has seen – and with worse no doubt to come – many are sympathetic. But the government, which has a 43.3% stake in the firm courtesy of taxpayer monies, should carefully consider whether buy-to-let should be allowed to die.

Prior to the recession the boom in the housing market was primarily driven by buy-to-let and first-time buyers didn’t get much of a look-in. If buy-to-let were allowed to wither it could limit the housing market when funding constraints ease, and hamper a wider recovery.

Elsewhere, it’s good to see that the Association of Mortgage Intermediaries is going to put pressure on the Financial Services Authority to tackle the rogue networks that are delaying commission payments to their appointed representatives.

Many ARs feel powerless – they’ve tried the law, they’ve tried the Financial Services Authority and they’re no better off, with commissions still unpaid. Here’s hoping AMI’s involvement will give networks the boot up the backside they need.