10:37 AM, 18th September 2013, About 12 years ago 9
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The Mortgage Directive, officially known as the ‘Credit Agreements Related to Residential Property Directive’ (CARRP) attempted to create a single regulatory framework which would govern all mortgages within the European Union. The EU lobbied hard for this directive so that EU citizens would understand the regularity regimes when purchasing properties in different member states.
However, in constructing the Directive, the EU Commission didn’t take into account the nuances of unusual mortgage products such as buy-to-let that exist in some member states. Therefore, when the Directive was sent to the European Parliament, the text would have made buy-to-let mortgages illegal. This would have been catastrophic for the UK’s private-rented sector.
Had the Directive passed in its original form, it would have been disastrous for landlords operating in the UK’s private-rented sector and the economy as a whole.
The final text is now going through the trialogue process which involves all 27 Heads of State and the European Parliament who will analyse the new text before voting on the new Directive to sign it off.
David Cox, Senior Policy Officer for the NLA says:
“The NLA is very pleased with the EU’s decision to exclude buy-to-let mortgages from the Directive. We have lobbied hard to ensure the UK’s main facility for investing in property to rent can remain in place.
“The private-rented sector is currently the only growing part of the UK’s housing market and I am certain that a mortgage Directive including buy-to-let mortgages would have prohibited this.
“This really is a success for the NLA and its European colleagues.”
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Mark Alexander - Founder of Property118
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Member Since January 2011 - Comments: 12120 - Articles: 1361
10:39 AM, 18th September 2013, About 12 years ago
I thought this was old news but clearly I was mistaken.
Thankfully, the final decision was as I thought it was three years ago – PHEW!!!
See >>> https://www.property118.com/eu-trying-to-kill-buy-to-let/20859/
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Neil Patterson
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Member Since February 2011 - Comments: 3452 - Articles: 286
11:20 AM, 18th September 2013, About 12 years ago
Even Germany is now making noises about devolving some power back to individual states and thinks the EU would be worse off without the UK.
A victory finally for common sense.
Puzzler
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Member Since July 2013 - Comments: 1264 - Articles: 1
13:40 PM, 21st September 2013, About 12 years ago
On what basis would they have been illegal?
Mark Alexander - Founder of Property118
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Member Since January 2011 - Comments: 12120 - Articles: 1361
13:50 PM, 21st September 2013, About 12 years ago
Reply to the comment left by “Puzzler ” at “21/09/2013 – 13:40“:
See >>> https://www.property118.com/eu-trying-to-kill-buy-to-let/20859/
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Michael Holmes
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Member Since September 2013 - Comments: 120
1:15 AM, 22nd September 2013, About 12 years ago
What are mortgages got top do with the EU, I thought we were just joining a free trade area. Thast is what the europhiles all said in 1972.
Puzzler
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Member Since July 2013 - Comments: 1264 - Articles: 1
11:51 AM, 22nd September 2013, About 12 years ago
Reply to the comment left by “Mark Alexander” at “21/09/2013 – 13:50“:
Thanks Mark but your article just says that there are “EU proposals to change the way lenders hand out mortgages to landlords”. I would like to know the details. I know it’s something to do with being regulated but why would that have an effect on landlords? I have done a few searches and haven’t found any clearly understandable sites.
Mark Alexander - Founder of Property118
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Member Since January 2011 - Comments: 12120 - Articles: 1361
12:10 PM, 22nd September 2013, About 12 years ago
Reply to the comment left by “Puzzler ” at “22/09/2013 – 11:51“:
The point is, it is NOT going to happen, that’s now been confirmed absolutely.
Puzzler
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Member Since July 2013 - Comments: 1264 - Articles: 1
13:14 PM, 22nd September 2013, About 12 years ago
Reply to the comment left by “Mark Alexander” at “22/09/2013 – 12:10“:
I know it’s not going to happen, but that doesn’t mean I am not interested in what it contains. For one thing, it will still be in force in mainland Europe, which doesn’t affect me but I have friends with property on the continent and like to discuss from an informed point of view and secondly, it could raise its head again in future (although unlikely).
My question is still – what is in this directive that makes it impossible for a B2L mortgage to comply? Or do you think lenders will balk at the additional regulatory hoops they will have to jump through and their possible higher risk of bad debts?
Mark Alexander - Founder of Property118
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Member Since January 2011 - Comments: 12120 - Articles: 1361
11:35 AM, 23rd September 2013, About 12 years ago
Reply to the comment left by “Puzzler ” at “22/09/2013 – 13:14“:
My understanding is that the proposal was to base all loans to individuals on income multiples or a proportion of disposable income.
There was a workaround in the event of this taking hold. That would involve all BTL lending to be corporate, i.e. lending to limited companies only. This would also have had significant consequences as people would have been unable to refinance without selling personally owned properties to companies and suffering associated CGT consequences. As we also know, there are a lot less lenders willing to offer BTL mortgages as we know them to limited companies.