It said: “We broadly agree with the Treasury’s proposed approach to implementing the directive. However, there are some specific issues that we highlight in our response, such as those relating to pipeline issues and buy-to-let (BTL).
“The directive does not make provisions for mortgage cases that are open but not complete by the implementation date of 21 March 2016. This hard deadline, without a transitional period, suggests there could be issues for consumers completing mortgages around this period.
“We have suggested a number of solutions in our response to help smooth this transition and to avoid unintended consequences for consumers.”
The second CML concern related to buy-to-let. The Council noted that buy-to-let is considered a business transaction, adding it would be disappointing if the UK were required to change this long-standing approach because of European rules.
The CML supported the Treasury’s decision to use a discretionary framework option for buy-to-let lending, rather than apply the mortgage credit directive in full.
It added: “The directive could, however, ultimately lead to buy-to-let loans being regulated under a three-tier system (with non-regulated loans, as well as regulation under both consumer buy-to-let and mortgage conduct of business rules). This will potentially create confusion for buy-to-let borrowers and complexity for lenders.
“Following the successful implementation of the MMR [Mortgage Market Review], we believe that the directive adds little value to the UK mortgage market.”
The CML will be responding to the Financial Conduct Authority’s (FCA) consultation before the end of the year.
The full CML response can be read here.