Wyles sounded the warning during the panel session of the Birmingham leg of The Buy To Let Market Forum after a member of the audience asked how quickly the buy-to-let sector would become regulated.
“Be careful what you wish for,” said Wyles. But he added he did not think full regulation was a likely reality.
“The Treasury were given the opportunity to regulate the market when Europe produced its mortgage credit directive. The course of action it took when it was handed this opportunity was to apply the least amount of regulation necessary to be legally compliant.
“There’s very limited appetite within the Treasury [for buy-to-let regulation] distinct from the FCA who I’m sure would be more than delighted to get hold of the buy-to-let market given half a chance.”
The government released the legislative framework for consumer buy-to-let in January this year which must be implemented into UK law by March 2016.
Consumer buy to lets are properties which were formerly residential and have been let out because circumstances prohibited a sale.
The government clarified that if a buy-to-let loan on a property had been bought for business purposes and for the sole purpose of letting it out, it remained unregulated. Equally, if the borrower has never lived in it and has a portfolio of properties, this also remained unregulated.
Wyles said the question of regulation remained open because it is impossible to predict how a new political power will react to the market. He felt confident that the Treasury would direct any new government to leave the buy-to-let market alone.
Not all panellists agreed with Wyles’ stance on keeping the buy-to-let market away from the control of the FCA.
Martin Reynolds, chief executive of SimplyBiz Mortgages, said in his personal view he wished it was regulated. He was concerned that the industry would become confused with a patchwork of regulation and voluntary codes.
The Council of Mortgage Lenders launched a voluntary Code of Practice at the beginning of April which attracted industry-wide support, in a bid to stave off further regulation from Europe.
Reynolds said: “I think we are at that place now where we have a little bit of regulation, a little bit more coming, we have the CML coming out with their code of conduct and if we are not careful we’ll end up with a mishmash which will lead to people getting confused.
“I’d like an open dialogue with the industry, Treasury, and trade bodies over a four or five year period to think about what regulation should look like.”
Gary Bailey, managing director of Blemain Group, said he thought there should be tighter regulation of the investment advice offered to help make the decision about whether or not to release funds from a pension pot to invest in buy to let, rather than the buy to let market itself.
