The commercial broker group has warned that properties are not financial products and cannot be controlled in the same way.
Chief executive, Adam Tyler says: “The call for regulation is to protect novice investors who have been sucked in to investing and now find themselves with an investment falling in value and struggling to find tenants. How would regulating the mortgage used to buy this property prevent this in any way? The investment vehicle for a buy-to-let is a property not itself a financial product, so the FSA will be unable to protect consumers here.”
Tyler says many lenders have been treating buy-to-let as a regulated contract for some time now, and it certainly hasn’t prevented them or their clients from getting themselves into trouble.”
He says: “The primary problem is the refusal to acknowledge that buy-to-let is a primarily a commercial transaction. Buy-to-let is not – as it has often been painted – either a simple investment decision, or a get rich quick scheme. A loan is to purchase a property to be rented out is a commercial investment, and as such really it is not an investment for the average consumer unless they have really done their homework.”
NACFB stresses that it is not “anti-regulation” but says any implementation on the part of the FSA should help solve the problems it was designed to address.
Tyler says: “The current market seems to have enough problems right now and it seems a shame to spend millions on a magic bullet that we doubt will hit its intended target.”