Full marks to Conservative MEP Vicky Ford for doggedly trying to ensure that buy-to-let is not included with residential mortgages in the European Commission’s mortgage directive.
Despite the many pieces of regulation that the UK market already has to contend with, the EU mortgage directive still hangs over it like a particularly menacing dark cloud.
In particular, the very fact that the EU directive was looking at regulating buy-to-let was a major concern. Like the rest of the market, buy-to-let fell off a cliff in 2008 with lending falling from 225,000 loans worth £28bn to 88,000 loans worth £8.5bn in 2009.
But it is gradually working its way back up. A total of 121,500 buy-to-let loans were completed in 2011, followed by 136,900 such deals during 2012, of which nearly half were for remortgages.
So it is great that during negotiations about the EU directive, held in Brussels last week, the proposal to regulate buy-to-let
mortgages was dampened by member states, European commissioners and MEPs alike.
Hopefully, similar progress can be made on rules surrounding packaged products, proposed by the European Parliament last year, which would ban all products that require a savings account not directly linked to paying off the mortgage. Current proposals exempt offset mortgages but would see some deals banned that are designed to help first-time buyers.
Lloyds Banking Group’s Lend a Hand range and in particular Barclays’ Family Springboard mortgages have made headway in recent years in providing loans for first-time buyers.
Ford says she is confident that both buy-to-let and guarantor mortgages will be protected under the EU directive.
Let’s hope she’s right.