The Council of Mortgage Lenders (CML) stated in its BTL research that the market was worth close to £100 billion, accounting for 11 per cent of new borrowing in 2006. Ian Giles, director of marketing at Kensington, agreed the market was buoyant and operating well without regulatory constraints. He suggested that with the prime BTL market seeing considerable growth, lenders and borrowers may look at the near-prime sector. “The BTL market has seen a lot of growth and most of the lenders are operating in the residential market as well. An area of growth could be near-prime BTL. CCJs are now being given for much smaller discrepancies, such as missing mobile phone payments, which means more borrowers have some form of debt or missed payment on their account details.”
However, Giles admitted that the Financial Services Authority (FSA) could take a keener interest if the BTL market continued to grow. “An eye should be kept on the market, but it is up to the regulator to decide what it does. It may decide that regulation is needed to protect amateur landlords.”
A broker, who wished to remain anonymous, added that the FSA could look at the structure of BTL products, looking specifically at fees. “Some lenders are charging arrangement fees in BTL that seem disproportionate to rest of the industry.”
