For ensuring that all buy-to-let mortgages are exempt from the new rules, pats on the back for the various regulatory trade bodies and in particular British MEP Vicky Ford.
Buy-to-let had initially been covered under the regulation alongside all residential properties, but the UK government lobbied hard against its inclusion.
However, the proposals stipulate that lenders will only be allowed to sell mortgage deals linked to savings accounts if the sole purpose of the account is repaying the mortgage. This would mean the end of initiatives such as Lloyds Banking Group’s Lend a Hand scheme, which requires borrowers to have 20% of the value of the property as savings, which are held by the lender as security.
This measure has come about as a result of a legitimate concern from a Belgian MEP who wanted to stamp out the harsh practice of enforced insurance sales with a mortgage in his own country. But the law of unintended consequences rules supreme and this has had a knock-on impact for the UK. At a time when lenders are struggling to innovate to help UK consumers get on the housing ladder, is banning such deals the right way to go?
And at a time when the news is full of speculation on whether the exit of Greece could drag Europe and the rest of the Western world into a Lehman Brothers-style death spiral, the logic behind implementing Europe-wide mortgage regulation becomes ever more perverse.