The National Association of Commercial Finance Brokers has criticised plans to regulate the buy-to-let mortgage market as ill thought out.

Chief Executive, Adam Tyler asked: “Why is this regulation being mooted? Is it to protect the consumer? Because if it is, it is at best mis-aimed, and unlikely to protect a prospective new landlord in any way.

“Buy-to-let is a commercial transaction: by definition the investor is buying a house to rent out in order to make money. The only time this doesn’t apply is when a property is being purchased to rent out to a member of the investor’s family – and regulation already covers this. Investors get into trouble because they buy the wrong kind of property and find they can neither rent it nor sell it; but regulating the mortgage offers a novice investor no protection against this at all. ”

“If the ostensible aim of this is to protect inexperienced landlords, then there should be a point at which the landlord is deemed to become ‘experienced’. And at what point should this happen? After they’ve bought one house? Five houses? When they have a portfolio of 40 properties?”

“Regulation is hugely expensive and in this case unlikely to be particularly effective. We as an Association, have seen members leave the market altogether because it’s simply too difficult to make a living. And although I fundamentally agree that the vulnerable consumer must be protected, caveat emptor should still be part of the financial services rulebook especially where commercial investment decisions are concerned. Reducing all financial products and services to milk sops does nothing for encouraging either maturity or self sufficiency in either the customer or the market in general.”