The findings come just in the approach to the second anniversary of mortgage regulation.
Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, commented: “Buy-to-let has undoubtedly been a success story for brokers, however it is surprising that there is such overwhelming support for regulating this market. Many brokers I have spoken to feel the mortgage market is adequately regulated already.
“The aim of mortgage regulation is to provide consumer protection. Buy-to-let, by its nature, is more of a business transaction and doesn’t have the same regulatory issues as mainstream mortgages.
“The call from brokers for buy-to-let to be regulated is probably due to the rise in people wanting to cash in on the growth of this sector. Some ‘amateur landlords’ may wish to seek advice before venturing into buy-to-let to see if it is the appropriate investment vehicle for them.”
Regulation has brought more transparency to the market and consumers have benefited with enhanced rights and added protection. Despite this, some brokers blame regulation for driving down profits and claim they will be less profitable in the future. Two in five (41 per cent) say the future will be less profitable for them because of the costs associated with compliance and the long-term impact of M Day. One in five (20 per cent) remains optimistic and believes the future heralds more profit.
Yousefi continued: “In the first year after M Day, brokers were faced with the demands of working in a regulated market and they reported issues with the quality of KFIs, a decrease in profitability because of a longer sales process and compliance problems. Two years on, these issues are still topical, however the fact that both lenders and brokers are writing record mortgage business speaks for itself.”
