Tuesday, Oct 20, 2009
'Unsustainable' buy-to-let market 'must be regulated'
Telegraph: 'Unsustainable' buy-to-let market 'must be regulated'
It called the buy-to-let market "unsustainable" and said the high incidence of mortgage fraud and arrears showed the need for the sector to be brought within the scope of FSA regulation.
If buy-to-let remained outside its remit, borrowers who were turned down for residential mortgages – which are already regulated and will be subject to tougher rules under the FSA's proposals – might try to take out unregulated buy-to-let loans instead, a process it called "gaming".
Posted by cat and canary @ 11:31 AM (486 views) Add Comment
4 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. bidin'matime said...
So many BTL investors are hanging on by the skin of their teeth, that the slightest rise in interest rates is going to wipe them out.
With a bit of luck, even if the FSA do not regulate BTL mortgages, the impact of the ban on self certified mortgages will be sufficient to depress prices further and create conditions in which BTL landlords are unable to remortgage and so will suffer the higher SVR rates as a result.
They can run but they can't hide ...
2. mander said...
I do not think that Buy to Let mortgages should be considered business loans.
If an interest only Buy to let mortgage let's say of £ 600 is offset by a rent of £600 than no tax is ever paid except when property is sold and there are capital gains but the property will never be sold. On the other hand a family with an interest only mortgage of £600 will not have it offset against their income tax being employed or self-employed. So are we putting a Buy To Let before a family in terms of taxation?
And secondly with all the free market principles Buy to Let should not buy already built property and rent back to families. Families need time to save for deposit to find work before taking a decision to buy and they will be out priced by Buy to Let looking to ever increase their portfolio.
3. Debt_scared said...
"If it moves tax it, if it still moves regulate it. Once it's dead subsidise it." Ronald Reagan on the socialist approach to industry.
Looks like we're firmly into stage 2 for BTL.
4. clockslinger said...
Don't quite think anyone is talking about banning BTL! The article suggests some interest only BTL's were inappropriate and the proposed regime would consider affordability (suggesting this was something not previously considered) on either a portfolio basis or individual property basis, but "affordability" will be a factor from now on! So, W exactly TF were these peoples lending criteria before, one has to ask?
People! This is the FSA we are dealing with, remember.....the very folks who were watching and regulating whilst all this happened in the first place...and we are expecting results?