Accord still awaits B2L OK

Accord Mortgages has reveal-ed that it is holding off from entering the buy-to-let market until the Office of Fair Trading comes to a decision on the Consumer Credit Act\'s effect on the sector.

The lender had previously admitted that it was waiting to see if the OFT would impose the CCA changes on small landlords with less than three properties. This would have led to early loan repayments and clampdowns on redemption charges which could have been catastrophic for the buy-to-let fixed rate market.

After conversations with the Council of Mortgage Lenders, the OFT has exempted new buy-to-let deals from the CCA and has also taken steps to exempt buy-to-let remortgages.

The Department of Trade and Industry states: “The amendment would exempt agreements that are entered into in order to provide credit of more than 25,000 to finance or refinance the purchase of land.

“This amendment should ensure that lenders are not faced with CCA regulation for buy-to-let borrowers with a small number of properties.

It adds: “The DTI intends the amendment to exempt further advances and remortgages so long as the main purpose of the loan is buy-to-let.”

Linda Will, managing director of Accord, says: “It seems to be partially resolved but we will see if we can get the green light to press ahead.

“It would be crazy to make new landlords exempt but then impose the CCA on remortgages so we are still holding out. But it’s looking good for the future.”

A spokesman for the CML says: “We have been working with the DTI, raising concerns about the CCA taking in buy-to-let. Discussions will continue so as to make it quite clear that all buy-to-let deals are exempt.”