» Read the complete article

The likely regulation of the buy-to-let sector by the Financial Services Authority will boost business and help the sector to flourish, according to one property expert.

Assetz says many of the buy-to-let investors who entered the market during the boom years hoping to achieve short-term capital gains have now left the market as a result of the credit crisis, paving the way for a new type of property investor taking a long-term view.

The firm says the FSA must go ahead and implement regulation, not just of buy-to-let mortgages, but of property investment as a whole in the UK. It says this would prevent the widespread mis-selling that has taken place in recent years and ensure risks are properly disclosed to investors.

It says regulation will also stop cowboy mortgage brokers and solicitors who continue to push investors into risky schemes and plans which only lead to false promises and broken dreams.

Stuart Law, chief executive of Assetz, says: "We fully support any considered move to regulate the sector, and this is certainly a step in the right direction and if implemented well could deliver a greater willingness by lenders to lend again into the buy to let sector by reducing risks and further improving transaction transparency.

“Buy-to-let mortgage regulation could well stop speculators with no money entering the market and should also improve the transparency of individual transactions further. Far from impeding the recovery of the market, taking away the speculative, higher risk transactions will improve the risk profile of the sector from a lenders perspective.

"This will aid the recovery of the housing market as a whole and buy to let loan to values and interest rates will become more competitive as lenders once again view more that buy–to-let as a lower risk sector than standard home loans.”

SOURCE: Assetz, 30/11/09

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