Excessive regulation of buy-to-let mortgages 'could be damaging'

Date:Friday 20th March 2009
Author: Susanna Kavka

If excessive regulations are imposed on lenders concerning buy-to-let mortgages, the private rental sector could be damaged, it has been claimed.

In his recent review of the UK's banking system, Financial Services Authority chief Lord Turner suggested that greater regulation should apply in the buy-to-let market.

According to Smartlandlord.co.uk, such increased regulation would be welcome in terms of bringing loans under the treating customers fairly rules.

This would mean that landlords would be at a reduced risk of lenders choosing to repossess their properties in "undue haste".

However, the organisation added that very tight legislation may cause lenders to turn away from the sector resulting in even fewer buy-to-let mortgages being available.

Smartlandlord.co.uk commented: "To make property an unattractive investment option would be irresponsible, to say the least."

In his review, Lord Turner also raised the possibility of mortgages being capped either in terms of income multiples or loan-to-value ratios.