Speaking at Countrywide’s housing market update in London this morning CML head of policy, Jackie Bennett, said she was not confident that lobbying would result in the European Commission changing the directive on credit agreements relating to residential property so that residential buy-to-let was exempted.
She said: “Although we successfully persuaded the government here that buy-to-let shouldn’t be regulated under a mortgage regime in the UK, it may well come out of Europe. The way the draft directive is put together at the moment means that it will get caught.
“There is a good chance of taking out buy-to-let where it is done with professional landlords but personally I think we have got less chance of getting it out for individuals.
“So the parent buying a property for students going away to university, second homes being let out, all those sort of things may be regulated by Europe. I think we stand less chance of getting those out of the directive. But we’re doing our best and there’s still a way to go.”
If this type of lending was to become regulated various lenders would be forced to apply for full residential lending permits from the Financial Services Authority.
