MBE 2011: Bridging and BTL should be regulated
Speaking at Mortgage Business Expo today Cleary said there was an uneven playing field because only part of the market is currently regulated.
He said: “Regulation is about protecting the consumer and in buy-to-let and bridging there is still a consumer in the picture it just looks a bit different from the usual residential transaction.
“It is unequal that someone who owns their house is protected but next door someone who rents isn’t.”
Cleary said although there would be a cost associated with more regulation he did not see a precedent for the consumer ultimately paying for it.
He said: “It has to be proportionate regulation but I don’t think it will impact on the volumes lenders will lend – that isn’t what happened in 2004 when regulation first came in.
“There also wasn’t an increase in cost then to the end consumer so if you get the regulation right it doesn’t necessarily mean cost will go up or lending will drop.”
But Andrew Lees, head of sales at Paragon, said the tenant would end up paying for increased regulation and argued against a move to regulating buy-to-let because it is a commercial transaction.
Julian Hartley, mortgage director at ING, said if regulation was to come in it should be around the investment decision rather than the mortgage but he agreed with Cleary that there should be more protection for the consumer.