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fru-gal

Market Should Prepare For Full Regulation Of B2L

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http://www.mortgagestrategy.co.uk/news-and-features/sectors/buy-to-let/buy-to-let-news/market-should-prepare-for-full-regulation-of-b2l/2014592.article

'Market should prepare for full regulation of B2L'

24 September 2014 | By Paul Thomas

2087471_Estate-Agent-To-Let-Buy-Mortgage

The market should prepare for full regulation of the buy-to-let market, according to industry experts.

Speaking at the Financial Services Expo today about the Government’s shock move to regulate “accidental landlords” to comply with the EU mortgage credit directive, commentators suggested full regulation is on the horizon.

Precise Mortgages managing director Alan Cleary says the whole buy-to-let sector should be regulated to protect consumers.

He said: “I would regulate the crap out of buy-to-let. I’ve got the same view I had in 2004 – that’s not so much about lenders or brokers misbehaving but for consumer protection. The buy-to-let market [already] acts like a regulated market; all the lenders treat it as regulated so the market’s sort of regulated already, but for me, it’s about [ensuring] consumer protection.”

Mortgages for Business managing director David Whittaker said: “Now while buy-to-let currently represents 12-13 per cent of gross lending, that probably seems a logical explanation but if buy-to-let grows to the volumes some are predicting in the years ahead becoming 25-30 per cent of the market, then you couldn’t have 70 per cent of the market regulated and 25-30 per cent of it, not.

“So it’s inevitably going to happen at some point. I just hope that we all behave ourselves sufficiently well not to give the regulator the reason or the excuse to hasten the day of regulation.”

Earlier this month the Government published a consultation on the EU mortgage credit directive, which proposes that “accidental landlords” – borrowers who have not actively decided to buy a property to rent it out and are not acting in a business capacity – must be regulated.

Examples of cases that would come under the proposed regulation include where a property has been inherited, or previously lived in by a borrower unable to sell it who instead decides to let the property.

Originally, the directive would have captured buy-to-let mortgages but the UK mortgage industry successfully argued that these mortgages should not be regulated in the same way as residential mortgages. But now the Government has U-turned on excluding the buy-to-let market from regulation, saying it needs to regulate the “accidental landlord” market in order to comply with the directive.

Edited by fru-gal

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Nah UKIP will hold the balance of power and the UK government will tell the EU to stop messing around with the British way of life. Vote UKIP=vote BTL.

Anything, anything but what we have now and the previous shower of s&^t. Ill be taking my chances with UKIP, not that i am the greatest fan.

Life is short and more of the same will not benefit me one bit.

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I had a brief skim through The Mortgage Credit Directive 2014/17/EU

To summarise it is regulating that banks should not lend to people who don't have the money to repay, should not lend on property that doesn't exist, should not lie about interest rates & charges etc

basically all the lessons the banks should have learned after 2007, but probably haven't.

I'm sure that whoever wins the next election, the powers that be will ensure this gets suitably watered down before being written into UK law.

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I had a brief skim through The Mortgage Credit Directive 2014/17/EU

To summarise it is regulating that banks should not lend to people who don't have the money to repay, should not lend on property that doesn't exist, should not lie about interest rates & charges etc

basically all the lessons the banks should have learned after 2007, but probably haven't.

I'm sure that whoever wins the next election, the powers that be will ensure this gets suitably watered down before being written into UK law.

Is this a common problem???

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He said: “I would regulate the crap out of buy-to-let. I’ve got the same view I had in 2004 – that’s not so much about lenders or brokers misbehaving but for consumer protection. The buy-to-let market [already] acts like a regulated market; all the lenders treat it as regulated so the market’s sort of regulated already, but for me, it’s about [ensuring] consumer protection.”

I doubt he holds this position from wanting lower prices/lower rents. Probably more to protect the BTL class. So many VI seen other landlords come under pressure from banks/receivers. There was that story of the happy landlord, oh-so-concerned that other landlords were losing their portfolios to receivers, making out it was the tenants who were being harmed. (If wider BTL was regulated, at least it should make BTL finance more expensive, and another put off new BTL entrants, meeting current high prices).

Story + iplayer video: http://www.bbc.co.uk/news/uk-england-kent-25889308

Reading that Property118 thread, and threads elsewhere, bugs me how many landlords thought they had the same consumer protection as residential mortgages for their BTL/commercial mortgages. How the powers of receivers were a shock to them... err they were around in the 90s crash doing their work then.

I can not see BTL being regulated; it is business/commercial borrowing as far as I am concerned. Clamping down on Consent To Let and regulating that should be good for the market. I've read on many forums owners rent out their former home under CTL, and buy again. Maybe they'll have to switch to BTL or look to sell. It's causing a bit of a fuss on a tax-planning site too. A thread I'm following on MSE with much complaining from landlords with Consent To Let on their residential mortgages, seeing consent fees raised, and other restrictions.

http://forums.moneysavingexpert.com/showthread.php?t=4490485&page=4

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Nah UKIP will hold the balance of power and the UK government will tell the EU to stop messing around with the British way of life. Vote UKIP=vote BTL.

Oh good, that's a progression from "vote UKIP, get Labour". At least voting UKIP means holding the balance of power. Nice.

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I doubt he holds this position from wanting lower prices/lower rents. Probably more to protect the BTL class. So many VI seen other landlords come under pressure from banks/receivers. There was that story of the happy landlord, oh-so-concerned that other landlords were losing their portfolios to receivers, making out it was the tenants who were being harmed. (If wider BTL was regulated, at least it should make BTL finance more expensive, and another put off new BTL entrants, meeting current high prices).

Story + iplayer video: http://www.bbc.co.uk/news/uk-england-kent-25889308

Reading that Property118 thread, and threads elsewhere, bugs me how many landlords thought they had the same consumer protection as residential mortgages for their BTL/commercial mortgages. How the powers of receivers were a shock to them... err they were around in the 90s crash doing their work then.

I can not see BTL being regulated; it is business/commercial borrowing as far as I am concerned. Clamping down on Consent To Let and regulating that should be good for the market. I've read on many forums owners rent out their former home under CTL, and buy again. Maybe they'll have to switch to BTL or look to sell. It's causing a bit of a fuss on a tax-planning site too. A thread I'm following on MSE with much complaining from landlords with Consent To Let on their residential mortgages, seeing consent fees raised, and other restrictions.

http://forums.moneysavingexpert.com/showthread.php?t=4490485&page=4

My thoughts exactly. I hope they don't extend consumer protection to BTL and take a BTL bail in off the table, it's the only thing that will make up for their current market participation.

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I doubt he holds this position from wanting lower prices/lower rents. Probably more to protect the BTL class. So many VI seen other landlords come under pressure from banks/receivers. There was that story of the happy landlord, oh-so-concerned that other landlords were losing their portfolios to receivers, making out it was the tenants who were being harmed. (If wider BTL was regulated, at least it should make BTL finance more expensive, and another put off new BTL entrants, meeting current high prices).

Story + iplayer video: http://www.bbc.co.uk/news/uk-england-kent-25889308

Reading that Property118 thread, and threads elsewhere, bugs me how many landlords thought they had the same consumer protection as residential mortgages for their BTL/commercial mortgages. How the powers of receivers were a shock to them... err they were around in the 90s crash doing their work then.

I can not see BTL being regulated; it is business/commercial borrowing as far as I am concerned. Clamping down on Consent To Let and regulating that should be good for the market. I've read on many forums owners rent out their former home under CTL, and buy again. Maybe they'll have to switch to BTL or look to sell. It's causing a bit of a fuss on a tax-planning site too. A thread I'm following on MSE with much complaining from landlords with Consent To Let on their residential mortgages, seeing consent fees raised, and other restrictions.

http://forums.moneysavingexpert.com/showthread.php?t=4490485&page=4

Is regulation different from being caught by the EU mortgage directive? Would it be possible to regulate BTL without coming under the directive? Isn't that what Alan Cleary is saying? If they are regulated doesn't that mean that potential older BTL'ers would not be able to get a BTL mortgage (and that is where most of the demand comes from, the boomers?).

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