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UK wins ground in European mortgage directive negotiations

Proposals to regulate buy-to-let mortgages in the same way as residential loans are set to be scrapped from the European mortgage directive.


Negotiations for the directive were held in Brussels last week between member states, European commissioners and MEPs.

Conservative MEP and shadow rapporteur Vicky Ford says it was agreed that buy-to-let will not be regulated in the same way as residential mortgages, as initially proposed.

Ford says progress was also made on tough new rules for 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 designed to help first-time buyers banned, such as Lloyds Banking Group’s Lend a Hand range and Barclays’ family springboard mortgages.

Ford says she is confident both buy-to-let and guarantor mortgages will be protected under the directive.

She says: “We are back in a good place on buy-to-let.

“On [packaged] deals, we have not won the argument but it is moving in the right direction. When I explain the product we are trying to protect, it is understood that we need to save them but we need to find the right language. I understand the problems around this because there have been some very opaque practices by certain banks and mortgage lenders, [packaging] insurance products with mortgages for example.”

Association of Mortgage Intermediaries chief executive Robert Sinclair says: “We do not want to ban some of the innovation we have seen in the UK recently, particularly the new Barclays products which are really useful. They would be effectively wiped out under the existing proposals.”


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  • Liz 15th March 2013 at 1:58 pm

    It would be a shame given how hard it is for FTBs if the savings related mortgages were banned.

    Personally I think BTL should be regulated and I provide BTL advice under the same process (and provide a full recommendation report) as for residential purchases / remortgages.