Professional landlords could be exempt from buy-to-let regulation under government plans to review how the sector will be regulated.
The Treasury plans to extend the Financial Services Authority’s remit to include buy-to-let mortgages and launched a consultation last December to find out what the industry thought of the proposals.
The Treasury has now published its report – Mortgage Regulation: Summary Of Responses – outlining the 51 responses it received.
It reveals that many respondents feel the current proposal of regulating buy-to-let on an individual basis would hit many individual professional landlords.
The Treasury has responded by saying it stands by its proposal to regulate the sector.
But it adds: “The government is mindful of concerns about the regulation proposed in the consultation, especially in view of the importance of the private rented sector, and has decided to reconsider the scope and form of the regulation to address these issues.”
Chris Norris, policy manager at the National Landlords Association, has welcomed the government’s decision to review the proposals.
He says: “There were a lot of assumptions that buy-to-let was almost being treated as the new sub-prime, which we didn’t necessarily agree with. We had concerns that the government was trying to use one tool to regulate everyone, from single investors with one or two properties for their pension to professional landlords with 200-plus properties.
“The government needs to have a clear idea of the market and where the potential damage could be done.”
Adam Tyler, chief executive of the National Association of Commercial Finance Brokers, agrees.
He says: “During our representation we outlined the difficulties inherent in a ’one size fits all’ regulatory package based on the residential market and explained that definitions would need to be thought out carefully so that regulation does not strangle a fragile market.”
The Treasury is running a separate consultation on investment in the private rented sector which closes on April 28. It says it will reflect on those responses before revisiting buy-to-let regulation.