NACFB launches B2L code of practice

The National Association of Commercial Finance Brokers has launched a code of practice for the buy-to-let market in a bid to ensure best practice in this buoyant commercial sector.

Recent months have seen a notable change in opinions of the buy-to-let sector, with advisers and lenders such as Southern Pacific Mortgage Limited and Birmingham Midshires Solutions advocating regulation of the sector.

NACFB says that the commercial nature of the buy-to-let market makes it difficult to regulate and the association has been a leading voice in the effort to keep buy-to-let outside of the Treasury&#39s plans for mortgage regulation.

The code, which will supplement the association&#39s existing code, has been designed to cover amateur landlords rather than the professionals commonly associated with mainstream commercial mortgages.

Keith Heron, chief executive of the NACFB, told Mortgage Strategy: “Our principal reason for introducing the code is to protect consumers by encouraging best practice. However, we were also prompted by other factors, including the rapid growth in demand for B2L properties, the similarities that exist with domestic mortgage lending and, not least, to avoid possible statutory regulation. Direct controls are less likely if sufficient brokers are prepared to subscribe to a robust voluntary CoP.”

Heron adds that though the code has been designed primarily to cover finance advice given to amateur landlords, it should not be regarded as a panacea for buy-to-let.

The NACFB intends to apply for OFT approval under the department&#39s new powers to support and promote voluntary codes and also expects the Council of Mortgage Lenders and the Intermediary Mortgage Lenders Association to lend their endorsement to the code.