Over the coming months, the FSA will be setting its final rules for the contractor mortgage market and the Council of Mortgage Lenders (CML) is hoping that this will not include regulations for the buy-to-let industry.

In October last year, the FSA proposed including buy-to-let mortgages in its remit and the Treasury has also been running various consultations about the possibility of extending the coverage of mortgage regulations in the UK. Yet despite the numerous buy-to-let scandals that emerged during the economic crisis, the CML feels that regulation would not boost consumer protection.

The Council of Mortgage Lenders believes that buy-to-let properties are commercial transactions undertaken for the purpose of investment. Director general, Michael Coogan said that for amateur property investors the problem is not with mortgage advice, rather the initial investment advice.

The CML does however believe that second-charge lending and selling on of mortgage books should be regulated.

With regards to second-charge lending they think that all secured lending should be regulated to create a coherent and comprehensive framework that is in line with EU regulations. They do however believe that that the impact on low-cost home-ownership should be properly taken into consideration first.

The CML is also wary about the dangers of “double” regulation where the power over the selling on of mortgage books has already been passed to a servicer or administrator. They agree that there are cases where consumers can suffer when mortgage books are sold on but that any new regulations should only cover interest rates, service levels and arrears management.

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