23 Nov

FSA to crack down on buy to let

FSA to crack down on buy to let

The Financial Services Authority (FSA) will crack down on buy to let mortgage providers next year, it has been predicted.

The clampdown on the buy to let sector will be aimed at safeguarding the interests of inexperienced buy to let investor, according to Lee Grandin of Landlord Mortgages.

Among the measures likely to be introduced are caveats to be included in advertising to make the risk involved in the investment more transparent to novices in the property market, he said.

Mr Grandin said: "It is fair to say that novice buy to let investors are most at risk from inappropriate investment return claims made by mortgage brokers and investment advisers.

"I am surprised that the FSA has not given guidance to buy-to-let mortgage brokers and mortgage lenders on what it expects them to disclose in respect to likely investment returns."

Up to 55,000 mortgage holders who took out buy to let loans in 2005-07 since 2005 are particularly vulnerable to a reduction of their return as a result of the slowdown in the property market, Mr Grandin added.

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