Buy-to-let mortgages 'need regulation'

10^th March 2010 at 17:15

An expert has warned that regulation is necessary for the buy-to-let mortgage market, just like any other home loan option.

The Council of Mortgage Lenders recently claimed that professionalism in the investment business of buy-to-let products means that regulation from bodies such as the Financial Services Authority (FSA) is not required.

However, finance journalist David Prosser wrote for the Independent that defaults on the loans are much more common thanks to deregulation, which has caused many problems including fraud.

"Lenders and advisers already have to accept FSA supervision on every other part of their industry, so making buy-to-let a regulated product should not add to the compliance burden," he explained.

The FSA recently issued Middlesex-based mortgage broker Oke Hassan with a final notice about a decision to cancel permission to continue with regulated activities.

The watchdog said that the company was not satisfying the threshold conditions set out in schedule six of the Financial Services and Markets Act 2000.

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