Regulating the buy-to-let market alongside the residential mortgage market would be beneficial, the Financial Services Authority has claimed.
At the Council of Mortgage Lenders’ Mortgage Industry Conference and Exhibition today, Sheila Nicoll, director of conduct policy at the FSA, told delegates: “It is a matter for the government to decide whether we should regulate buy-to-let. But we certainly see benefit in having the buy-to-let market regulated alongside the residential mortgage market.”
She said: “We are very alive to the issue of buy-to-let and the European mortgage directive. One of the problems is that the buy-to-let market is far larger in other member states, such as Germany, so it is difficult for them to see why it should not be regulated. But the FSA is very aware of the industry’s concerns on this.”
Paragon Group chief executive Nigel Terrington said after her speech: “Nicoll is on board with our view that buy-to-let should not be included in the European mortgage directive, but there is a theme within the FSA that they would like to regulate buy-to-let if they could, but the Treasury has squashed this idea.
“My fear is that there is apathy among other European countries on the UK’s fears about regulating buy-to-let under the directive. There will be a horse trade between the various EU countries, who will all come to the directive discussions with a number of issues they want to be included or excluded.
“Whether buy-to-let is excluded will depend on whether we can get enough support from other countries to get this pushed through.”