Landlords could enjoy greater protection under proposals in the Financial Services Authority’s newly released mortgage market review to regulate buy-to-let lending.

The FSA is currently responsible only for the residential mortgage market, leaving buy-to-let deals less regulated.

But it is argued that the sector is no longer the preserve of seasoned investors with large portfolios, and that greater assurance is needed for the growing number of landlords with just one or two properties.

About a third of rented homes in Britain are now owned by landlords with just one rental property.

Under the proposal, buy-to-let lenders would be forced to adhere to similar standards as banks and building societies which provide finance for residential borrowers — including clearer information on the total costs of new loans, and better protection from repossession. New rules on affordability criteria for residential borrowers could also apply to buy-to-let investors.

The number of landlords has expanded rapidly in recent years. The FSA said that only £3.1 billion was approved in buy-to-let mortgages in 1999, compared with £44.6 billion in 2007. There are now about a million buy-to-let investors in Britain.

Mortgage brokers suggest the market currently needs lenders to increase the number of deals available.

There were only 227 deals available to landlords yesterday, compared with 3,648 in July 2007, according to Moneyfacts.co.uk, a financial website.

Melanie Bien, a director of Savills Private Finance, a broking firm, said: “What we really need here are more products as those coming up to remortgage have very little choice available to them.”

In its report, the FSA also set out plans to regulate “second charge” loans secured against a borrower’s property.