Gang-of-five challenges EU buy to let regulation

Gang-of-five challenges EU buy to let regulation

8:52 AM, 30th June 2011, About 13 years ago 1

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A gang-of-five of mortgage industry trade bodies has joined forces to challenge European Union proposals for mortgages that include tougher regulation of buy to let.

The EU is pushing a draft mortgage directive through the European parliament that aims to tighten up rules for residential and buy to let lending.

The intention is to protect consumers from misleading marketing and to ensure consumers do not overcommit themselves to loans they cannot afford to repay.

The lobby group represents most major UK banks, building societies and finance companies plus the many mortgage brokers who introduce business to them.

The trade bodies are the Council of Mortgage Lenders (CML), the British Bankers’ Association, the Building Societies Association, the Intermediary Mortgage Lenders Association and the Finance and Leasing Association.

Despite a recent leak from HM Treasury suggesting buy to let regulation was a ‘done deal’, the gang is determined to pressurise the government and EU to relax the directive.

The group argues that the UK treats buy to let borrowing as commercial funding, not residential lending, which is the opposite to most other European countries.

Some industry insiders have already indicated that landlords might consider buying investment property with a company rather than as an individual if the EU makes the regulatory switch.

The lobby group is also concerned that the cost of complying with the directive will be disproportionate to the gains for consumers.

Another section of the directive also opens a pan-European market for residential and buy to let lending.

This could be good for borrowers as European banks who might enter the UK market charge significantly lower interest rates than UK banks and building societies.

“The belief is European regulation should only extend to residential mortgages advanced to consumers. Buy-to-let loans, along with lending on properties providing a combination of residential and commercial use, should be excluded from the rules,” said the CML.
“We also believe that decisions about the availability and pricing of mortgages should be made by the lender, and not based on requirements to assess the creditworthiness of customers.”


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Sam Wong

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15:13 PM, 9th July 2011, About 13 years ago

How politicians get to be so stupid is beyond me.

The obvious answer is to educate the buyers and gen them up on financial dealings that they are about to enter into.

Why punish the whole country just because there are so many ignorant idiots about who cant be bothered to learn about what they are doing ?

People have to stick to what they know or take the risk of venturing into unknown territories.

Life is a venture. Take the risk or stay at home. There is no free lunch. We all have to pay our tuition fee.

This attitude of making everybody else pay to protect the innocent and the ignorants who shouldnt be in the kitchen in the first place is making life so expensive and uncompetitive that the entire country is broke.

Instead of taking the responsibility to educate the populace and prepare the young people for adulthood, the politicians force everybody down the path of the lowest common denominator because it is easier for them to do.

Brainless twits. The lot of them.

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