Last week, the Financial Services Authority’s (FSA) head of conduct policy Sheila Nicoll’s spoke at the Council of Mortgage Lenders conference where she said that the regulator “sees the logic of the buy-to-let market being regulated alongside residential.”
However, David Whittaker, managing director of Mortgages for Business argues that the cost of regulation will be borne by the end borrower.
He said: “I don’t accept the FSA’s old argument that by regulating the sector, it drives down price. Competition and performance is what drives down price and overlaying regulation on that does not deliver any discernible benefit to the borrower. For the one in ten thousand that might need protecting from themselves, the 9,999 left will pay for that privilege.”
Whittaker added that there has never been any proof that regulation delivers consumer benefit.
“When it comes to a mortgage, lots of members of the public need to be guided and advised because they’re not financially sophisticated and may need some degree of protection from themselves.
“But if someone’s got 80 properties, what are you going to be protecting them from? They’re running a fully fledged business as big as some of the lenders.
“The paperwork for that goes from here to next doomsday and it costs money. The only person who bears the cost of that is the end borrower.”
