Buy-to-let mortgage investment advice "might be open to regulation"

Date:Monday 5th October 2009
Author: Max Freedman

The only aspect of the buy-to-let mortgage sector that could be open to regulation is investment advice, it has been suggested.

David Whittaker, managing director at Mortgages for Business, questioned whether or not it would be feasible to regulate the entire sector, asking: "How would you give advice to someone who is buying one house and already owns 750 others?"

He stated that a property investment usually goes wrong because a market participant has purchase a property that is either in the wrong location, they are asking for an inappropriate amount of rent or their property is in bad condition.

Mr Whittaker said that the mortgage does not usually play any part in a property investment going awry.

"The only aspect of buy-to-let that might be open to regulation is the investment advice," he concluded.

Mr Whittaker made his comments after the British Property Federation called for all buy-to-let mortgages to be regulated by the Financial Services Authority.