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Cable drops call for FSA supervision of buy to let

LibDem Shadow Chancellor Vince Cable has ended his campaign for regulation of buy-to-let mortgages but warns that amendments to the Regulation of Financial Services Bill are still needed to protect consumers.

Cable says, after industry consultation, he now accepts the Government’s argument that regulation of buy to let is not appropriate.

But he says the Bill should be enlarged to cover property investment clubs to stop regulatory arbitrage and back up the work of the Department of Trade and Industry to crack down on such schemes.

Treasury economic secretary Ivan Lewis says the FSA is considering these concerns and will take appropriate action if necessary.

Cable also says legislative changes should be made to the Bill regarding Ijara mortgages, used by Muslims. He says consumers are left without adequate legal protection as the lender remains the property owner while the mortgagee is a tenant.

Cable says: “It is my understanding people using the buy-to-let market know the complexities involved and it is not in itself a financial product. But regulation is required for property investment clubs and legislative changes could be made regarding Ijara mortgages. The Bill now goes to the House of Lords, which will hopefully take these points on board.”

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