Buy to let regulation vote delayed again by EurocratsMake Text Bigger
European politicians have delayed voting on buy to let regulation and other key home loan proposals.
The vote was scheduled to go before the European Parliament’s economic and monetary affairs committee today (April 25, 2012).
A raft of nearly a thousand amendments has left politicians failing to agree on almost everything, so they have decided to take another two weeks or so to thrash out the details.
The mortgage directive was set for the first vote before Christmas, but disagreements and amendments pushed the date back until February and then April.
The internal market and consumer affairs committee are reviewing the proposals passed the draft in December.
When the draft bill is finally approved by the economic and monetary affairs committee, the full parliament still has to vote on implementation later this year.
Even if the vote is approved later this year, enforcing the rules could take a year to 18 months.
Making the directive law will mean buy to let mortgage applications are considered for approval in the same way as standard home loans – unless changes to the contrary are agreed in the draft.
This will make applying for buy to let mortgages more difficult for landlords as –
- Banks and building societies will have to restrict loan to value on interest only lending
- Borrowing would be capped by how much other income the landlord has and would not be calculated on rents coming in from tenants.
The directive means little on other countries as they either have no buy to let market or run mortgage lending the same way as residential mortgages are underwritten in the UK.
The worry of many industry insiders is the UK will end up with an unworkable directive as other member states horse trade clauses to meet their own interests.
For instance, a proposal for a 14 day cooling off period to let borrowers consider a loan has already been scrapped in committee.
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