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The Government are considering regulating buy to let mortgages – which could have mixed results for landlords, both small and large.

The Government's financial arm, the Financial Services Authority published a report into the future regulation of UK finances. One area where it said it may look more closely is buy to let.

It's report said: "[The FSA] 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."

Currently, buy to let is not regulated and experts say it could be dangerous to have more Government intrusion in the sector. Keshav Thukaram, managing director of smartlandlord.co.uk says: "I would welcome the regulation of the buy-to-let market in terms of bringing loans under the treating customers fairly rules. Arrears in the buy-to-let sector are rising, particularly as a result of tenants failing to pay their rent, and with buy-to-let lending not currently regulated by the FSA, landlords run the risk of being treated unfairly with lenders repossessing in undue haste.

"But the motivation behind the proposed regulation seems to be to penalise landlords; tightly control house price growth; and constrict the growth of the private rented sector. With very tight regulation, lenders will turn away from the sector and even fewer buy-to-let products will be available. To make property an unattractive investment option would be irresponsible, to say the least. A growing number of young people are disillusioned with the prospect of owning property, and the rest are unable to get on the ladder. With only a negligible social sector to pick up the slack, this begs the question, ‘where are people going to live?'"

Whatever happens with the regulation of the mortgages themselves will only become clear later this year, but one this is for sure – if you are looking to get hold of a buy to let mortgage, you need to find a good, regulated broker. Check your adviser is FSA registered and make sure they play by the rules – if you have any doubt, turn away.

SOURCE: Smartlandlord.co.uk, FSA, 18/03/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog