Lenders and borrowers to face further regulation

September 22, 2014 by Brendan O'Neill

Rules and regulations

The UK Government is currently in consultation, looking at integrating European regulations on lending to set common standards.

The ultimate goal of the regulations that have been set out in the EU Mortgage Credit Directive is to ensure that consumers, when purchasing a property, are adequately protected and given the most suitable advice.

The UK’s lenders have seen a number of changes following April’s Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Review. The Financial Conduct Authority imposed new reforms, to make sure that borrowers could afford and maintain the repayments on any loans taken. The new regulations also mean that it will be easier to identify risks to the mortgage market’s financial stability sooner.

Here in the UK, lenders incorporate many of the EU rules into their practices, but the current directive will mean that second charge lending is processed in line with first charge lending. To prevent unnecessary disruption, the Government has waited for these new rules before making the step to implement any changes that may also apply to buy-to-let lending for non-commercial purposes.

The Council of Mortgage Lenders has welcomed the consultation, and any changes will not take place until the March of 2016. A spokesperson for the Treasury has said that the new regulation should not affect the vast majority of buy-to-let borrowers.

With the ongoing changes to the mortgage process and revolving rules and regulations that must be adhered to, it’s not hard to see why many people seek out the advice of a professional who has completed the relevant CeMAP training.