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Turner Review: FSA considers BTL regulation

The Turner Review says the FSA is considering regulating the buy-to-let market as well as second charge mortgages.

The review says the FSA’s paper later this year reviewing mortgage conduct of business rules will look at whether or not extension of its regulatory scope to these sectors is necessary.

The Turner Review says: “The paper will consider whether more effective regulation of the mortgage market, through tighter conduct rules or direct product regulation, would require the extension of the FSA’s remit to cover second charge mortgages and buy-to-let mortgages.”

Mortgages for Business managing director David Whittaker is concerned about how the FSA would implement buy-to-let regulation.

He says: “There is a difference between someone who buys a buy-to-let property as an extension to their pension fund, who might need more protection against bad advice, and someone who owns 350 buy-to-let properties, who has a limited company in his own name, who might arguably know more about the sector than the FSA itself, and would not need the same degree of protection.

“I am not sure how the FSA can make that distinction.”

Whittaker also warns there is a danger that more transactions are driven into the commercial loan sector where he warns investors could be exposed to even greater risks.

But Landlord Mortgages managing director Lee Grandin welcomes the news and says he has been calling for FSA regulation of buy-to-let mortgages for years.

He says: “There has always been an opportunity for people to be misled when taking out buy-to-let mortgages, particularly where off-plan new build properties are concerned, but often the problems only materialise in a downturn.

“Our firm has always followed the FSA’s MCOB guidelines in sales of buy-to-let mortgages even though this was not compulsory.”


Mortgage lending halves in Q4 2008

Mortgage lending almost halved to £45bn in the fourth quarter of 2008 from £86.6bn in 2007. Repossessions surged by 68 per cent to 46,750 last year from 27,900 in 2007.

Fidelity Intl wants to shut 10 multi funds

Fidelity International is proposing to close 10 of its 12 offshore multi-manager funds as they have failed to generate critical mass. The natural resources fund and global high-alpha fund will remain open.

Tailored to fit

What carnage across all the markets and almost every asset class. Life office shares for just over 20p and daily percentage swings in blue-chip banks of 20 per cent, interest rates of 0.5 per cent and the bizarre position (since reversed) of sterling increasing in value after a rate cut.

Cricket - thumbnail

England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.


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