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EU almost shut UK buy-to-let market – MEP

  • 03/07/2013
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EU almost shut UK buy-to-let market – MEP
European Union legislators came close to shutting the UK’s buy-to-let market and killing off guarantor mortgages during the mortgage directive negotiations, a key negotiator has revealed.

Conservative MEP Vicky Ford, who acted as shadow rapporteur for the committee overseeing the European mortgage directive, said some politicians tried to use the legislation to solve their own domestic problems.

She told the Council of Mortgage Lenders: “We’ve managed to pull back a directive that could have had massive unintended consequences for the UK. At one stage, it would have meant lending in buy-to-let markets would have been impossible because lenders would not have been able to take into account rental income when assessing creditworthiness.

“We also had a problem with changes made by the European Parliament, which would have meant that guarantor and shared equity mortgages would have been outlawed, but after much negotiation we managed to make changes to the text to allow them to continue.”

Ford’s victories included allowing British lenders to keep the key facts illustration for five years before conforming to the standardised European version.

She questioned how many home buyers needed to compare mortgage products in more than one country: “The ‘key facts’ document enables consumers in the UK to compare the products available to them, and that’s what is needed.

“I put in a lot of work via parliamentary amendments to try to get the European information sheet looking like the UK key facts illustration, which at least has the benefit of having been devised through consultation with consumers.”

Negotiations for European Union-wide rules on mortgages began in 2005 and the final directive still needs to be approved. The European parliament is not expected to vote until September at the earliest.

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