Skipton Building Society has announced how it will comply with the Mortgage Credit Directive and says it will stop lending to borrowers who earn in foreign currencies.
From 1 October, the society will no longer accept applications from borrowers who earn their income in a foreign salary. Lloyds yesterday announced it would also stop this type of lending.
The society says it will adopt the European Standardised Information Sheet, rather than implement the KFI+. It hopes to have launched this by the new year.
Skipton head of products Kris Brewster says: “We feel it’s important that we implement the new MCD rules promptly to ensure that both we and are broker partners can deliver the transition smoothly and professionally for our mortgage customers, we really empathise with our broker partners who will have to deal with yet more changes in the mortgage industry so close to the recent changes under MMR.
“We want to reassure brokers and help them as they navigate their way through this new legislative challenge. That’s why we’ve opted to issue the ESIS from the start, rather than implement the KFI+ and then later down the line move on to the ESIS. Launching early will also ease transitional pipeline challenges around binding offers and cooling off periods.”
It also says it will offer consumer buy-to-let.
Brewster says: “We believe consumer buy-to-let is massively important in aiding customer mobility, particularly the need for let to buy solutions to remain on offer in the marketplace. Brokers have enough going on in their worlds without needing the added confusion of which lenders are doing what and when, so we’re happy to be up front and honest in sharing our plans with them and our commitment to do it right first time.
“Unfortunately the new rules do mean from 1 October we will be unable to accept applicants who earn or plan to repay their mortgage from sources of any currency other than sterling. It simply isn’t cost effective for us to manage the currency risk.”