MortgagesJul 24 2014

Buy-to-let needs to be regulated: ARLA chief

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Buy-to-let lending may need to be curtailed by imposing stricter criteria on landlords, David Cox, managing director of the Association of Residential Letting Agents, has urged.

Mr Cox was responding to MPs’ concerns that pension reforms which come into effect next year could prove a catalyst for new and inexperienced investors entering the buy-to-let market. He said lenders could impose additional criteria on landlords; such as becoming accredited or using a licensed agent in order to ensure potential investors understand their responsibilities when letting property.

He said: “In essence, buy-to-let products do not need to be regulated as lenders themselves impose safeguards through strict eligibility criteria which landlords must meet in order to secure a buy-to-let mortgage.”

Mr Cox said what the industry required was “greater regulation of the lettings sector”, saying that many new entrants were unfamiliar with the responsibilities that accompany letting property.