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Call made for buy-to-let regulation

Call made for buy-to-let regulation

Category: Mortgages

Updated: 05/10/2009
First Published: 05/10/2009

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The buy-to-let sector should be responsibly regulated by the Financial Services Authority in a bid to crackdown on reckless lending, the British Property Federation (BPF) has said.

At present, buy-to-let mortgages are treated in the same way as a business loan, whereas traditional mortgages, such as owner occupier or equity release products, are controlled by the FSA.

Regulation would insure against lenders throwing money at borrowers without making sufficient checks and would help refinance the housing market, the organisation insists.

"We need to make sure the property-fuelled meltdown doesn't happen again," said Ian Fletcher, director of policy at the BPF.

"Professional landlords have suffered as a result of the banks refusing to lend. If landlords can't expand or invest in new homes, it hurts all areas of society. It's vital that we learn from our mistakes and don't constrain future housing investment."

The body has also said that tenants living in homes repossessed by lenders should be given a minimum of two months to find alternative accommodation.

This is not usually a problem in most cases, but where properties are rented out without permission, tenants have less right to remain.

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