Changes to Consumer Buy-to-Let Mortgage Rules

Following feedback from the consultation paper (CP15/3) released in February this year the FCA has issued a Policy Statement PS15/11 snappily titled ‘Buy-to-let mortgages – Implementing the Mortgage Credit Directive Order 2015, feedback on CP15/3 and final rules’.

The Policy Statement confirms how the FCA will approach the implementation of the government’s legislative framework for consumer buy-to-let (CBTL) mortgages set out in the Mortgage Credit Directive Order 2015 (“the legislation”).

The approach can be summarised into 4 main areas as follows:

  • Registration – Legislation now requires firms that wish to lend, administer, intermediate, arrange or provide advisory services in relation to CBTL, from 21 March 2016, to be registered by the FCA to do so. The cost and how you register will depend upon whether or not the firm is already FCA authorised or whether they hold an interim permission for consumer credit (firms that are FCA authorised or hold interim permissions will pay £100);
  • Aggregated data reporting – Firms will have to submit a quarterly return via the GABRIEL system recording all CBTL lending activity within the relevant time period, including a nil return if applicable;
  • Complaints handling rules – Firms will be subject to the majority of the FCA’s complaints handling rules which are set out in the Dispute Resolution Handbook (DISP) with the exception of the complaints publication rule;
  • Modification to other Handbooks – As a result of this Policy Statement to incorporate CBTL there will be modifications to other FCA Handbooks, including changes to the Supervision Manual (SUP), Enforcement Guide (EG), Decision Procedures and Penalties Manual (DEPP), Perimeter Guidance Manual (PERG) and the Glossary.

The Policy Statement can be found here.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

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Our View

This Policy Statement has been brought about by changes in government legislation and will come into effect from 21 March 2016. Therefore, firms that will be active in the buy-to-let arena have no option but to comply with all of the requirements. Failure to do so will mean there will be a requirement placed on their FCA permissions that they do not carry on such activities.

Action Required By You

We recommend that you take the opportunity to read the Policy Statement if you intend to be involved in the buy-to-let market on or after 21 March 2106.

Prepare to register as soon as possible, the FCA will be accepting registration later this summer;

ATEB clients should speak with their account manager; otherwise contact ATEB here to find out how we can help.

About the Author

Steve is an ATEB Director and has a deep understanding of all matter regulatory, built up over his 30 years + in the industry. With a training background and a technical brain, he overseas numerous complex projects and client implementation work.

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