Nationwide has unveiled plans to implement the new Mortgage Credit Directive rules in early 2016, ahead of the 21 March 2016 deadline.
The lender will be using the updated key facts illustration (KFI) from day one rather than the European Standardised Information Sheet (ESIS) format and believes this change will have minimal impact on lending activity.
The key intermediary websites NFI Online and TMW Online are being updated to be Mortagge Credit Directive compliant and a communications programme about the changes is also being launched.
In addition, Nationwide has issued a reminder to intermediaries intending to conduct consumer buy-to-let business that they will need to have the appropriate permissions to do so and be fully registered with the FCA ahead of the MCD deadline.
Additional questions will be added to the Nationwide mortgage application form to identify consumer buy-to-let borrowers.
There will be no material changes to Nationwide’s existing lending policy.
Nationwide unveiled how they are handling the Mortgage Credit Directive requirements as the Council of Mortgage Lenders warned the European rules plus changes to landlord taxation could have “cumulative, unintended and perhaps damaging consequences.”
The CML stated: “It is possible that some lenders, particularly small and medium-sized firms, may be cautious about offering consumers buy-to-let mortgages.
“One consequence may therefore be that consumers wanting to take out buy-to-let loans will have a narrower choice in the market, particularly in the short term.”
Ian Andrew, managing director of group intermediary sales at Nationwide, said: “We believe that the introduction of the MCD regulations will have minimal impact.
“This is due in part to the fact that many of the measures build on the prior planning made by lenders and intermediaries as part of the last year’s Mortgage Market Review, with many MCD requirements that are needed in the UK already in place.
“Moreover, many of the additional measures involve technical changes that will not directly impact on the mortgage application process, nor on the ability of lenders to lend.
“Nationwide is also beginning a programme of communication with our intermediary partners and our BDMs are already available for the help and support needed as the changes are implemented.”
David Hollingworth, associate director of London and Country Mortgages, said lender announcements should start to come thick and fast ahead of MCD implementation next March.
He said: “Getting some clarity around lenders’ intended approach will be welcome and help the market adjust in good time and prepare for any changes to process.
“However, what is already becoming apparent and is underlined by Nationwide here is that there is little expectation of MCD causing lending activity to stall.”
emma.hughes@ft.com
