Commenting on the recent publication of the Treasury’s consultation on how the UK will implement the requirements of the European Mortgage Credit Directive, Richard Lambert, Chief Executive Officer at the National Landlords Association (NLA), said: “The Treasury's proposals, published as part of this consultation, are confusing and ultimately contradictory of other government policy.

“They imply that a lender should be subject to different regulations depending on whether their client has taken a conscious decision to become a landlord, or opted to become a landlord in reaction to a change in circumstance such as inheriting a property. This appears both impractical and unnecessarily costly to implement.

“The NLA is disappointed that the Government has felt the need to propose this arbitrary distinction between types of landlords in order to implement the EU Mortgage Directive.

All private landlords are held to the same legal standards when letting property; they should have access to the same range of financial products and lending criteria. In practice this framework is likely to exclude new landlords and those requiring the most flexibility from the buy-to-let market.

“While the industry pushes on with efforts to professionalise landlords and the wider sector, we're disappointed that Government instead seems intent in this instance to infantilise the business of providing homes.”

This news announcement by the government understandably prompted reaction from those involved in buy to let lending on a daily basis. We spoke to two highly experienced financial intermediaries for their views on the prospect of buy to let mortgages being regulated.

Mark Hayward, senior commercial manager at Watts Commercial Finance said: “Here at Watts, we see regulation as a positive thing. Too many people seem to enter into the property investment world without fully understanding every aspect of what is involved.

“It is therefore important to distinguish between the professional landlord who is building a portfolio for their future and 'accidental' landlords who have inadvertently, as a consequence of their personal circumstances, fallen into this sector. This could be due to a career move and geographical relocation or simply being unable to sell their property and choosing to rent instead. Arguably, these clients may require more assistance and advice.

“It does however seem somewhat harsh to potentially refuse mortgage applications for these clients especially if they demonstrate low risk and can demonstrate that they have the relevant business acumen and an understanding of the, albeit 'one off', buy-to-let transaction.

“We agree that these 'accidental' landlords need to be protected but at the same time we must also not lose sight of the fact that professional landlords also still require the highest level of client care.”

However Lucy Hodge, Managing Director of Vantage Finance takes a less positive view of the government’s about turn on buy-to-let mortgage regulation.

“In my view this will not be positive news for the industry. Regulation exists to protect consumers and to make sure that the different sectors of consumer finance are well governed and standards are maintained to an appropriate level to achieve that end result,

“Trying to apply a partial regulation to a sector will no doubt be problematic and differentiating between a landlord electing to become a landlord and one who has become a landlord through changing circumstance could create some grey areas which result in the entire sector eventually becoming regulated and I cannot see this working.”