Insiders close to the Treasury said it had told mortgage trade body officials that regulation of buy-to-let lending to consumers was “a done deal” - despite the Council of Mortgage Lenders and the Association of Mortgage Intermediaries lobbying European officials to stop this happening.
Draft regulation in the European Directive on Credit Agreements Relating to Residential Property published by the European Commission earlier this year proposes to catch buy-to-let lending to consumers.
The directive still has to go through the European Parliament and Council and may yet be amended but it is understood that trade bodies are preparing a best case regulatory framework should lobbying fail.
Robert Sinclair, director of AMI, said: “We’re trying to keep commercial B2B buy-to-let out of it. This could mean individuals set up as an incorporated company and invest in buy-to-let not for personal use. Those are much more sensible guidelines to take and I think from discussions with Treasury this makes common sense.”
Sinclair added that he didn’t think regulation was something the buy-to-let sector should be afraid of, bar the potential costs associated with it.
The CML said: "Buy-to-let lending is so different to residential lending and the CML has always believed it should not be regulated in the same way. However, the UK could find buy-to-let inadvertently captured by the European Directive so it is sensible for Treasury and the trade bodies to come up with a proposal to try to mitigate this threat.”
The Treasury and FSA were unavailable for comment.
