The Association of Mortgage Intermediaries is keen to work with the Association of Residential Letting Agents to put in place a code of practice for the buy-to-let market.
The AMI believes a code of practice would bolster confidence in the buy-to-let sector, which will not be regulated by the FSA when mortgages come under its remit in October this year because it is seen as a commercial area.
But the AMI says the problem with initiating a code would be finding an organisation to police it. It predicts the code could have to draw on the resources of Arla or the National Association of Commercial Finance Brokers.
AMI director Chris Cummings says although buy to let will not be regulated by the FSA, the regulator will be looking at buy-to-let financial promotions. The FSA says it expects any regulated firm to handle non-regulated product promotions to the same standard as regulated promotions.
This revelation follows Charcol senior technical manager Ray Boulger's assertion that the Government's decision to allow buy-to-let mortgages to sit in a Sipp could be the first step towards the product being fully regulated.
Concerns have been expressed about the stability of the continued buoyancy of buy to let as it has yet to be tested in a market downturn.
AMI policy officer Ben Stafford says: “We are exploring ideas about what could potentially be put in place to establish best practice for the buy-to-let market.”
Arla spokesman Malcolm Harrison says: “Anything which promotes good practice has got to be good news.”
FSA spokesman Rob McIvor says: “If a regulated firm was running misleading promotions for a product that we do not regulate, then theoretically we could look at it and say the promotions were generally at fault but we are not looking at buy to let specifically.”