B2L remains under threat from Europe

The latest Mortgage Market Review paper struck a good balance between consumer protection and choice.

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However, some areas will provoke further debate, especially verification of income, affordability assessment and the provision of advice.

The Financial Services Authority also notes that buy-to-let regulation is a matter for the government, which views this as inappropriate under the Mortgage Conduct of Business rules because it is a commercial activity and would not sit comfortably under a consumer protection structure.

Areas of the MMR make this more apparent than ever. Affordability in buy-to-let is driven by rental income, so most of the MMR proposals on affordability assessment and verification would be unworkable for buy-to-let – for example, looking at the borrower’s committed expenditure in relation to their ability to pay the mortgage.

The proposed control of interest-only lending would also be inappropriate for buy-to-let. These areas would need to be looked at solely from a buy-to-let perspective if ever applied.

But the threat from Europe still remains. The authorities have been unable to negotiate exclusion for buy-to-let and talks rumble on.

It has never been more important for us to make our voice heard. Our industry bodies are doing a great job keeping conversations alive and it will be interesting to see how things progress this year.