Scrapping regulations on buy to let industry 'is a mistake'

14 June 2010

Written by Steve Olejnik

The government's move to scrap the plan to impose new regulations on the buy to let sector is a mistake, one organisation has said.

John Heron, managing director of mortgages provider Paragon, believes the leader's pledge to remove some of the bureaucracy from the sector is a good one but that the complete rejection of the proposals is ignoring the positive side of legislation.

"There are no mandatory controls of letting agents at present, leaving both landlords and tenants at the mercy of the rogue elements that unfortunately blight the sector, undermining the good work carried out by the majority of agents," he said.

Unless agents are forced to join a licensing scheme, like the Association of Residential Letting Agents (Arla) of the National Approved Letting Scheme, both landlords and tenants are at risk of unscrupulous individuals and companies, which do not pass on deposits and rent.

Paragon is not the only organisation that does not think it was a good idea to reject the regulations. The Arla recently commented that it did not agree with the government's move, stating that lack of legislation could undermine the reputation of the buy to let sector and put tenants at risk.

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