NACFB demands FSA rethink BTL regulation proposals

Adam Tyler, chief executive of NACFB, said many lenders have been treating buy-to-let as a regulated contract for some time now and it certainly has not prevented them or their clients from getting themselves into trouble.

He said: "The call for regulation is to protect novice investors who have been sucked in to investing in buy-to-let by tales of millionaire property landlords and who now find themselves with an investment falling in value and struggling to find tenants. How would regulating the mortgage used to buy this property prevent this in any way?"

Mr Tyler said with a buy-to-let investment, the investor would be expected to do the research to see that their chosen investment vehicle is suitable, is in the right location and complies with all the necessary legislation.

He said "The investment vehicle for a buy-to-let is a property not itself a financial product, so the FSA will be unable to protect consumers here.

"The NACFB is not anti-regulation, but we do believe that regulation should be intelligent and help solve the problems it was designed to address. It seems a shame to spend millions on a magic bullet that we doubt will hit its intended target."

Mike Davies, head of mortgages for East Sussex-based Skerritt Consultants, said: "I would agree with the association in asking how regulating the mortgage used to buy a property would protect novice investors."