Buy-to-let should be regulated. That is the view of the majority of mortgage intermediaries and many lenders.
We suspect it is the view of the FSA following an expression of concern about the market by director of high-street firms Sarah Wilson. The failure to regulate leaves a dangerous gap in consumer protection. Many buyers-to-let are not commercial landlords but are using a buy-to-let property as their primary investment, often for retirement as well as for income. Buy-to-let mortgages could be inappropriately sold to these people.
Money Marketing is not exactly a fan of the current regulatory regime but the FSA is the only show in town. If it is accepted that financial regulation is a necessary evil, there is no justification for buy-to-let's continued exclusion.
The simple truth
Savings products will never fly off the shelves, no matter what the Government does. Yet the Secretary of State for Work and Pensions Alistair Darling dreams of simple regulated products sold without advice.
Isn't that what stakeholder was meant to achieve? MM does not understand why stakeholder is not made easier to sell by relaxing the price controls coupled with tax-incentivising employers to get as many employees covered for pensions as possible. There are too many onerous regulations but the Government should be aware that in tearing up the current regime, particularly on the direct side, it risks renewed misselling.
Chancellor Gordon Brown vowed at Labour's party conference in 1999 that there would never be a repeat of pension misselling. In its zeal to close the “savings gap”, Labour must not break this promise.