Mortgage regulation - Gov stalls

The government has announced that, following its consultation on mortgage regulation, it will publish revised proposals on the buy-to-let sector later this year, after the end of April.

In its report entitled Mortgage Regulation: Summary of Responses, the Treasury said although government intervention was needed in the sector, more work needs to be done to refine proposals for buy-to-let to fall under the FSA's remit.

The Treasury maintains that some sections of the buy-to-let sector had been the source of significant consumer detriment that could be prevented through regulation.

Treasury still wants regulation

The Treasury added however that it did not agree with those respondents who argued that these considerations mean that the buy-to-let sector should remain unregulated.

The Report said: "A large number of respondents agreed with the government that there is overwhelming evidence that the operation of some of the buy-to-let market has suffered from significant market failure and that this demands government intervention.

"The government remains committed to action to address these failures."
However it added "to address respondents concerns and in view of the importance of the private rented sector, the government has decided to explore changes to the form of regulation proposed."

The government said it would examine how to ensure the impact of regulation on the buy-to-let market is proportionate, particularly for individual professional landlords.

The document stated: "It will also consider how best to protect consumers from the range of possible causes of detriment that may result from buy-to-let including, if appropriate, the consequences of poor investment decisions as well as unaffordable borrowing."

The report stated the Treasury would commence further consultation on buy-to-let after the conclusion of the current consultation on investment in the private rented sector on 28 April.

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