Following the removal of the £25,000 financial limit for CCA regulated loans in April this year Blemain Finance has advised brokers to be aware of the Legislative Reform Order which comes into force on 31st October, as the changing legislation will alter the regulatory status of certain buy to let loans.
Gary Bailey, Director at specialist buy to let and secured loans provider Blemain Finance explains: “One of the unintended consequences of the CCA 2006 regulations which came into force earlier this year was that any loans against a buy to let or semi-commercial property would have become CCA regulated unless eligible for business exemption. The Legislative Reform Order will therefore apply to all loans – including those against buy to let and semi-commercial properties and regardless of the loan amount - where the borrower and their immediate family will occupy less than 40% of the property. From 31st October these loans can be treated as unregulated.”
Bailey continues: “The net result is that all loans against buy to lets and semi-commercial properties with less than 40% family occupancy can now be treated as unregulated regardless of the charge type or the sum being borrowed.”
