The Financial Conduct Authority (FCA) has published its consumer buy-to-let policy statement, including the registration process for all mortgage lenders and intermediaries to comply with the European Mortgage Credit Directive (MCD).
PS15/11: Buy-to-let mortgages – implementing the Mortgage Credit Directive Order 2015, feedback on CP15/3 and final rules emerged today alongside further guidance in the FCA handbook.
The industry views a mortgage transaction as consumer buy to let (CBTL) if the applicant has a single buy-to-let property and also used to live in it.
From 21 March 2016, a firm acting as a lender, administrator, intermediary, arranger or carrying out advisory services in relation to consumer buy-to-let business will also be registered by the FCA.
The policy statement is the regulator’s response to the CP15/3 consultation paper out in February this year.
The regulator will start accepting registration applications later this summer giving firms six months to comply. The regulator has issued a specimen registration form for guidance.
A streamlined online application process will only be available to those firms holding Part 4A permissions or interim permissions for consumer credit, and where a previous CBTL registration has not been revoked.
The FCA is only accepting proactive applications and there is no automatic registration. Lenders will also not be expected to check the registration status of intermediaries, although lenders may do so for reasons of risk.
From 21 March 2016, buy-to-let intermediation is no longer a regulated activity so advisers won’t need a consumer credit permission. However, the regulator will hold details of the firms regulated to perform consumer buy to let on a register.
In February, an impact assessment suggested just 11% of the market, or 18,000 transactions will be affected by the consumer buy-to-let regulation changes each year although the full scope of the market remains unclear.