The European directive on credit agreements
relating to residential property (CARRP) has had its final amendments voted through.
The UK government will be allowed to exempt buy-to-let mortgages from the
directive, lifting the threat that all buy-to-let lending would have to be
assessed without taking rental income into account.
It had been proposed that buy-to-let lenders
would have to assess mortgage applications in exactly the same way as
residential mortgages. This would have a highly damaging effect on the UK’s
buy-to-let market which has played a highly useful part in shoring up the
housing market.
None of the changes are quite a done deal, as the legislation still has some way to go, but pundits took encouragement from yesterday’s decisions. The UK government will actively have to enforce the buy-to-let exemption, and can only do so if they are convinced there is no detriment to consumers. The Government will now come under renewed pressure to make the exemption.
Further information can be found here: http://www.fsa.gov.uk/about/what/international/mortgages
None of the changes are quite a done deal, as the legislation still has some way to go, but pundits took encouragement from yesterday’s decisions. The UK government will actively have to enforce the buy-to-let exemption, and can only do so if they are convinced there is no detriment to consumers. The Government will now come under renewed pressure to make the exemption.
Further information can be found here: http://www.fsa.gov.uk/about/what/international/mortgages
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