We’ve long been campaigning against EU regulation of the buy to let lender market in the UK alongside most major trade bodies and industry news channels and earlier this month we had the taste of victory. The insanity that would have followed buy to let lending being regulated with an affordability mindset has been averted and the successful provision of housing in the UK by private landlords can continue.
Most European Countries Don’t Have Private Individual Landlords
It’s shocking to consider that regulating the buy to let market was being debated by a collection of nations with no experience in the sector. The fact that even one minute of discussion was devoted to income assessment for landlords on the same basis as income is assessed for individuals buying a residential property is a demonstration that the closer we become to the abject failure that is EU regulation of the financial markets the closer we’ll come to the absolute failure demonstrated by once mighty European economies such as Spain, Italy and Greece.
The committee had struggled to find agreement and delayed a vote five times since its initial date in December 2011.
Europe Imposes More Costs and Less Information
Currently UK borrowers are the best informed in all of Europe. The Key Facts Illustration, which despite being optional for Buy to Let is still provided almost all the time by reputable lenders, provides unrivalled levels of detail and analysis for borrowers. When you speak to your broker in the UK there is no hiding behind sparse information sheets and obtuse lender documents, no, there is one standard, clear sheet that provides huge levels of detail. Many of you have probably taken it for granted whilst you have been a landlord. Now it is to be replaced. With a more expensive, less informative document. What’s worse is if you have a mortgage now, you’ll likely pay more for your next one as lenders seek to cover the cost of the new document.
We are disappointed that in the longer term the KFI looks like it will be replaced by the ESIS which gives consumers less information and will cost lenders a substantial sum to implement. However, the indications are that the UK will have five years to implement that change.
Building Societies Association, talking to Mortgage Strategy