But as the FCA began to wield power, we saw that some brokers would actually be unable to get a licence in this brave new world. Was it fair for the NACFB to deny them membership of the Association when, through no fault of their own, someone had changed the rules? And on the other hand, was it fair on the fully regulated members, if we allowed the unregulated ones in? Would doing so in effect devalue the brand and the logo? Our members voted no, it would not.
We now have a code of conduct aimed solely at unregulated brokers. But regarding regulated brokers, what surprised us when updating the Code of Practice is how much doesn’t need to be touched. Although the total sum of business written by our members is within striking distance of the pre-crash levels, the world we’re all operating in feels very different (for example, note that the reported number of interest-only loans outstanding has been falling and continues to fall, by over 16 per cent in the past twelve months).
All the FCA is really doing is weighting the balance of best practice a little more towards the protection of the borrower, and a little less in favour of the commercial broker. It means our Code of Practice barely had to change at all, so long as the end user understands that the FCA has its own requirements.
The Council of Mortgage Lenders published some interesting statistics recently, ones which got us thinking again about our survey results this year. Buy-to-let properties are almost as numerous as owner-occupied properties in most parts of England and Wales, and in London, buy-to-let properties outnumber owner-occupied ones by a factor of almost two to one.
Clearly the buy-to-let sector is not bumping up against the buffers. In fact, it’s further behind peak levels than the market as a whole, according to our survey data. 2007’s CML-reported £45 billion is some 50% ahead of the projected 2015 sum of £30 billion, whereas our members are just 20% behind peak values, or 28% behind if you adjust the figures for broker number inflation.
That said, landlords have slowed down rent hikes in August 2015, the latest monthly private rental sector report of the Association of Residential Letting Agents. Just a third of letting agents have reported increases in rents for tenants in August, down from 37 per cent in July and the lowest proportion recorded since April. The number of properties available to rent in London continued to fall in August. Nevertheless, buy-to-let is going to remain an attractive option for the forseeable future and we should expect to be able to arrest the decline in business written by our members.
