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NACFB urges caution against regulating buy-to-let
The National Association of Commercial Finance Brokers (NACFB) has rejected calls from "novice investors" for greater regulation in the buy-to-let sector.
Adam Tyler, chief executive of the NACFB, said he was unsure what new regulation the Financial Services Authority (FSA) could bring in and what it would achieve.
He said: "Many lenders have been treating buy-to-let as a regulated contract for some time now, and it certainly hasn't prevented them or their clients from getting themselves into trouble.
"The primary problem is the refusal to acknowledge that buy-to-let is a primarily a commercial transaction."
Mr Tyler said the sector had often been viewed as a "get rich quick scheme" or a simple investment decision, rather than as a commercial investment.
He said calls for regulation had been fuelled by "novice investors" attracted by property television programmes and millionaire landlords who now own properties with falling values and fewer tenants.
Mr Tyler said more research by borrowers would help them to make better investments, adding bad investment decision and not the products were to blame for the current problems.
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."
