The CCA is currently being reviewed by the Department of Trade and Industry (DTI) and could see small landlords come under regulation.
Linda Will, managing director of Accord Mortgages, said the lender’s entry into the sector was being delayed because it wanted to see what new rules will be put in place. She added that if smaller landlords did come under the Act, it could send shockwaves through the industry.
“Any move by the DTI would change the attractiveness of entering the BTL market from a lender’s point of view. If you were to take a catastrophic view, you might even ask would there be a BTL market because it would have major implications, such as the early repayment of loans and even launching products into the sector. There could also be a glut of properties being sold by landlords which would have a massive effect on the rest of the market.”
Final details are yet to emerge of how the CCA will be changed, with an announcement due later this year.
Sue Anderson, head of external affairs at the Council of Mortgage Lenders, said the early indications were that BTL would be excluded from the CCA.
“We’re getting fairly positive indications that the DTI wants to keep BTL out of the CCA as it is not consumer lending. We’re not expecting it to be a problem.”
However, John Heron, managing director of Paragon Mortgages, believed it was too early to tell what the final picture would look like.
“There is some debate about the degree to which BTL mortgages might be covered by the CCA and we’re waiting for the DTI to clarify its position.”
