BTL to escape EC’s mortgage credit directive: CML
The UK has been given the go-ahead to exempt buy-to-let products from the European mortgage credit directive, the Council of Mortgage Lenders has said.
A statement from the CML said the European parliament’s economic and monetary affairs committee had listened to its concerns over the proposals.
The CML said: “Many of the long standing issues we have been lobbying on have reached a positive outcome for the UK. For example, the UK would be able to exempt BTL from the directive and we would be able to keep the key facts information for five years after the directive has been implemented.”
The European directive on credit agreements relating to residential property said: “Member states may decide that some or all of the articles of this directive do not apply to credit agreements where the property is not to be occupied as a dwelling by the consumer or a related person, where the consumer accepts to be exempted from the provisions of this directive.”
John Heron, chairman of the Intermediary Mortgage Lenders Association, said: “It is encouraging that the unique characteristics of the UK housing market have been recognised.”
However, he warned the directive does not exclude buy-to-let in its entirety.
He said: “Even the economic and monetary affairs committee approved draft would require the UK authorities to exempt buy-to-let and they will only be minded to do so if they are convinced that there is no material detriment being caused to consumers in the way buy-to-let products are advised on and sold.
“It is clear that the FSA has concerns in this area and the industry needs to work hard to ensure that areas that have troubled the regulator such as “gaming” and fraud are effectively mitigated by water-tight processes.”
In the next stage of the directive, the European Council will present its view on the legislation.