FSA to regulate mortgage advice

THE Government has given the Financial Services Authority the power to regulate mortgage advice - meaning all lenders and intermediaries will now be directly authorised by the watchdog.

Initially, lenders alone were to come under the FSA's rules. But after pressure from the Council of Mortgage Lenders (CML), consumer groups and intermediaries and lenders themselves, it was decided to extend the FSA's role.

This change of heart could mean a delay to the final implementation of the regulator's powers since documentation will have to be amended. The FSA was due to publish its final rules in January next year, ready to begin regulating lenders in August.

But the CML says the downside of the delay will be more than offset by the benefits of a true, single regulatory system. 'We are delighted and relieved that the Government has at last made the right decision about the best way forward for mortgage regulation,' said Michael Coogan, CML director-general.

Buy-to-let mortgages and advice will not be covered under the new rules.

The FSA says that it would be up to the Government to change its definition of the consumer mortgage if buy-to-let was to come under the remit of mortgage regulation.

Experts say those considering property as an investment should make sure they know exactly what they are getting into and that they do not overstretch themselves.