A year after calls for investment warnings on all Buy to Let mortgages, the FSA has taken no action, claims solicitors and repossessions specialists Moore Blatch.
The firms warns that with the number of loans in arrears approaching 2 percent and repossessions now standing at 0.22 percent the scale of the problem calls for immediate regulation.
More than a year ago Moore Blatch highlighted the likelihood of problems with the Buy to Let market, and called for lenders, brokers and the FSA to make investment warning mandatory.
Moore Blatch believes that some brokers may now face the threat of litigation if any Buy to Let investor can support a claim that the broker provided advice that went further than purely that of providing a mortgage.
The solicitors are concerned that litigation lawyers could have a strong case against a broker if they recommended buying properties as an investment using a Buy to Let mortgage.
The repossession expert warns that Buy to Let mortgages can be seen as heavily geared investment vehicles and, therefore need appropriate warnings.
In the absence of FSA regulation Moore Blatch is advising any broker that sells the mortgage to firstly document that they are not giving any investment advice and secondly provide an appropriate investment style warning.
While neither are currently required by the FSA they could help support the broker’s legal position if any client decided to take civil action in the future.
Paul Walshe, head of lender services at Moore Blatch, said, “Action needs to be taken urgently to protect the interests of both brokers and lenders. We urge the FSA to ensure that Buy to Let investment is subject to the same consumer warnings as other forms of investment, particularly at this time when many amateur investors are facing substantial losses, and many can argue that they were not warned.”
• The Residential letting arm of Hamptons International, a subsidiary of Emaar Properties, has launched a pre-Christmas campaign offering tenants a seasonal discount on their rent if they enter into a new tenancy before the end of December 2008.
All Hamptons’ lettings branches across London and the South of England are taking part in the initiative.
A large number of the company’s residential landlords are offering 50 percent discounts on the first months rent for tenancies which start before the end of this year.
This offer applies to a large number of high quality properties which Hamptons International is presently marketing. The properties available vary in size and shape - from stylish apartments to family homes, and from cottages to country mansions.
Lettings manager Boutaina Siddle said: “This campaign is yet another example of Hamptons’ forward-thinking and innovative approach to a time of year that traditionally sees a number of agents take their feet off the pedals.
“We remain committed to doing everything possible to help our landlords find the best tenants prior to the Christmas break and, as a result, have some fabulous savings available at the moment to pass onto prospective renters.”
