BTL must be allowed to flourish, says CML

The chief economist for the Council of Mortgage Lenders warned that local authorities could be deterring buy-to-let investors by requiring them to have licences, and that rent control was no solution to Britain’s housing shortgage.

He said: “Piecemeal regulation, with uneven enforcement, may simply front-load costs on to compliant landlords, tenants and other bodies. Most landlords are operating small businesses and we believe more should be done to simplify regulation, rather than add additional requirements.”

Mr Pannell said regulators should recognise that investing in the private rented sector was a “commercial transaction” and that acting to protect consumers in this sector was “not appropriate”.

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He added: “Attempts at rent control would discourage buy-to-let landlords and investment in both the supply and quality of rented accommodation. If the government wants to see lower rents, and lower housing costs more generally, it must look at what it can do to address the root cause of undersupply.

Figures from broker Mortgages for Business have shown that remortgaging outstripped purchasing in the buy-to-let sector for all but standard residential properties in the second quarter of this year.

Semi-commercial property saw the biggest rise, with remortgages accounting for nine in every 10 transactions in quarter two, up from just 54 per cent in the first quarter these year.

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David Whittaker, managing director of Mortgages for Business, said: “Buy-to-let mortgages are at their most affordable since the downturn. Lenders have gratefully accepted the help on offer from the Funding for Lending scheme and have passed some of the savings on to investors in the form of lower rates and a wider choice of mortgages.”