NACFB locks horns with the FSA over regulation

Thursday 28th January 2010

According to the latest publication by the National Association of Commercial Finance Brokers (NACFB), the trade body recently met with the financial services regulator in order to discuss the impending regulation of the buy-to-let sector.

Chief executive of the NACFB, Adam Tyler, has not been afraid to speak out on his opposition of the proposed regulation, calling it a costly “magic bullet” that was unlikely to hit its intended target.

Despite maintaining that the trade body is not anti-regulation, last year Mr Tyler called for the need for intelligent regulation, stating: “The call for regulation is to protect novice investors who have been sucked in to investing in buy-to-let by tales of millionaire property landlords and endless television programmes on the subject, and who now find themselves with an investment falling in value and struggling to find tenants. How would regulating the mortgage used to buy this property prevent this in any way?

“The investment vehicle for a buy-to-let is a property not itself a financial product, so the FSA will be unable to protect consumers here.”

Following the 18^th of January meeting between the FSA, Mr Tyler and ten NACFB members, it would seem that Mr Tyler’s stance remains unchanged, as he labelled the proposed regulation “rushed and dangerous.”

He said: “The next stage for me is to compile a response on why regulation in this sector is not needed and this needs to be with the FSA by the 31st of January - the closing date for consultation of the MMR Review.

“The professed plan is to get this passed during this parliament and this can be achieved as it is second level legislation; but it is a move that I think is both rushed and dangerous, as it also includes second charge lending. If this happens, the FSA will re-consult twice again on how the regulation is going to work, once in mid 2010 and again at the end of the year with regulation in place by early 2011.”