This paper outlines our proposed approach to implementing a legislative framework for ‘consumer buy-to-let’ (CBTL) mortgages.
Why are we issuing this consultation paper?
The Mortgage Credit Directive (MCD) introduces EU-wide conduct standards for firms selling mortgages.
The government has chosen to use an exemption in the MCD that means member states do not have to apply the Directive’s requirements to buy-to-let mortgage activity. In order to rely on this exemption, a member state must have in place an appropriate framework for this type of activity from 21 March 2016. The government has established in legislation a framework for ‘consumer buy-to-let’ (CBTL) mortgages.
The government’s framework and supporting legislation does not give the FCA general rule-making powers, such as the ability to modify the legislative conduct standards which firms will be expected to follow. It does, however, give us powers to register, supervise and – where appropriate – take action against firms carrying out CBTL activity.
This consultation paper outlines our proposed approach to implementing the framework, including our proposed Handbook changes to allow us to use those powers when necessary.
CP15/3: Buy-to-let mortgages: implementing the Mortgage Credit Directive Order 2015[1]
Who should read this paper?
This consultation will affect lenders, administrators, intermediaries and consumers in the buy-to-let mortgage market.
Next steps
We want to know what you think of our proposals. Please send us your comments by 19 March 2015 using the online response form[2].
Find out more
For more information:
- view the FCA Handbook[3]
- CP14/20: Implementing the Mortgage Credit Directive and the new regime for second charge mortgages[4]
- Implementation of the EU Mortgage Credit Directive[5] (HM Treasury)