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&#39Specialist lenders have edge in buy-to-let market&#39

Specialist buy-to-let lenders will win out over the big non-specialists, according to National Association of Commercial Finance Brokers chief executive Keith Heron.

Heron warns of the dangers of non-specialist lenders offering buy-to-let products as he says they tend to treat them in the same way as the rest of their mortgage range, which he believes is the wrong business model.

The NACFB was set up last December to plug a regulatory gap as buy to let does not come under FSA regulation. It is backed by the MCCB and has 500 regulated brokers.

But Heron thinks every broker offering buy to let should be operating under the NACFB&#39s code.

He is in favour of voluntary regulation of the sector, saying that buy to let would be a very difficult product to bring under statutory regulation as it would be difficult to draw a line between commercial and residential lending.

He also cites the cost of bringing buy to let under FSA regulation.

Heron says: “I believe lighter-touch voluntary regulation of the sector supported by members is the way to go. But one of the dangers I see at the moment is that some of the big lenders treat buy to let the same as they treat their other products, which I think is the wrong business model. Specialist lenders will win out over those driven by systems.”

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