In a new report entitled "Responsible Regulation" the BPF also calls for tenants living in properties repossessed by banks to be given a minimum of two months to secure alternative accommodation. The report, backed by Savills, comes as the FSA has announced plans to regulate sale and rent-back deals.
People renting homes bought on a buy-to-let mortgage generally escape immediate eviction given that lender would have expected to have tenants in the property.
However, in circumstances where properties bought on a normal owner-occupier mortgage have been rented out without permission, tenants have less right to remain.
Meetings held between the BPF and officials from the FSA and Treasury as far back as 2005 revealed a wholesale awareness of dubious practice within the residential property investment market. Both the FSA and Treasury the problem was the other’s responsibility.
The black hole of irresponsible lending has damaged both the housing sector’s reputation and the ability of banks to lend. As a result, professional landlords cannot expand their portfolios when demand for renting is insatiable.
Ian Fletcher, BPF director of policy, said: "Many lenders simply threw money at buy-to-let borrowers during the boom without sufficient checks on who they were lending to or what they were lending for. Consumers have suffered as their buy-to-let dream turned sour and many buy-to-let lenders were at the root of our economic problems as organisations such as Bradford and Bingley found themselves over exposed to bad loans.
"We need to make sure the property-fuelled meltdown doesn’t happen again. Professional landlords have suffered as a result of banks refusing to lend. If landlords can’t expand or invest in new homes, it hurts all areas of society. It’s vital that we learn from our mistakes and don’t constrain future housing investment."
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