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Concerns that FSA is not moving fast enough on mortgage regulation

Currently buy-to-let mortgages are unregulated although this is the area where many analysts believe that the worst lending practices have taken place, with allegations of mis-selling and mortgage fraud.

The FSA is set to be keen on more regulation but there is concern that tightening buy to let lending could have a detrimental effect on the property rental sector.

According to, increased regulation would be welcome in terms of bringing loans under the treating customers fairly rules. This would mean that landlords would be at a reduced risk of lenders choosing to repossess their properties in undue haste.

However, the organisation added that very tight legislation may cause lenders to turn away from the sector resulting

The FSA, the City regulator, is also set to look at whether or not 100% mortgages should be banned and examine the availability of mortgage finance. A consultation paper is to be published in September. A key issue will be preventing 'excessive' property price rises in the future.

But some mortgage brokers believe that the FSA is not moving fast enough. According to mortgage expert Ray Boulger, of broker John Charcol, this means that nothing will be done about loan-to-value ratios and lending limits until after the next election.

There is also concern that the issue of 100% mortgages should be addressed sooner rather than later. Recently, Gordon Pell, deputy chief executive of the Royal Bank of Scotland, spoke out against the practice of providing consumers with mortgages worth 100 per cent of the value of their properties, describing it as 'immoral.

However, the FSA is concerned that withdrawing these super size mortgages could make it virtually impossible for first time buyers to get on the property ladder while acknowledging that it could encourage people who later find themselves in debt.