FSA: Buy to let mortgages may have become the new 'self-cert'

Landlord Expert
By Landlord Expert June 30, 2011 09:03

The Financial Services Authority (FSA) has accused intermediaries of abusing buy-to-let mortgages by providing loans for ordinary residential buyers, in a move which may affect buy to let landlords.

In its latest newsletter, the authority's manager of retail intermediaries and mortgage sector David Geale suggested that buy-to-let mortgages may have become the "new self-cert".

He raised concerns that intermediaries may be able to use the system to bypass the stringent income and affordability checks that are required for residential regulated mortgages.

"This is particularly the case where lenders are offering buy-to-let products to first-time buyers and where the affordability test is based on projected rental income only," said Mr Geale.

He went on to say that lenders with less robust systems and controls could find themselves exploited, in an issue that could also have a negative impact on property owners who act as genuine landlords.

It follows the announcement by planning minister Greg Clark this week that the government may remove red tape to make it easier for empty buildings to be transformed into new commercial properties.

Landlord Expert
By Landlord Expert June 30, 2011 09:03

BEST LANDLORD OFFERS

Recent Member Comments

  • User AvatarDave Osbourne { Had a blocked gully which tenant ignored after recent rain had the lounge and hall partly flooded the floor is going to be replaced but... } – Oct 16, 4:47 PM
  • User AvatarFiona Bullock { Dear Sir, I have received a text and email from my tenants saying they wish to end their tenancy of 3 years with effect from... } – Jul 05, 12:55 PM
  • User Avatarchristine clare timmins { Hi Rahima - Did you manage to resolve your problem? I am new to this site and saw your dilemma - we are about to... } – Jun 28, 9:12 PM
  • User AvatarShani Zvi { Hey, I need an advise regarding the TDS registration. The agency I'm working with claims that they need to register the tenant Zero Deposit scheme... } – Jun 04, 11:43 AM
  • Amanda Harrison { Advise needed }
  • Older »

News Archive