Government set to impose new Buy-to-Let regulations

The Government has decided to impose new regulations on part of the buy-to-let market in light of the European Union’s new Mortgage Credit Directive.

From March 2016, the Treasury has announced that “accidental landlords” – borrowers who do not acquire a property to purposefully rent it out – will be regulated.

Cases that would qualify for the proposed regulation rules would be when a property may have been inherited or where a borrower may be unable to sell and decides to let the property out. On the other hand, borrowers who purchase a property for the sole purpose of letting it out will remain unregulated.

The Council of Mortgage Lenders (CML) has said they are disappointed at the latest announcement after expecting the EU would not impose any regulatory restrictions on the buy-to-let market. CML Director General Paul Smee says: “With the mortgage market review out of the way, we now enter round two of regulatory change as a result of the European mortgage directive. We are hopeful that most of the impact should be modest, as much of it was anticipated and helpfully built in to the new rules in the first place.

“It is frustrating though that, despite earlier assurances, the buy-to-let position turns out not to have been adequately resolved, resulting in a new proposal for regulating part of the buy-to-let mortgage market.

“The regulatory regime now being proposed is based not on any evidence of a need for additional consumer protection, but purely on ensuring that the European legal requirements are met.”

This article was kindly contributed to Pace by Paul Flavin, of Zing Money. It is Paul’s belief that good financial advice should be available to everyone & that by simplifying the mortgage process you are able to make an informed choice through greater understanding.

Paul places great emphasis on customer service & always seeks feedback on how to best improve this area. “Making a house purchase or remortgage as painless an experience as possible for you is my objective”.