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FCA consultation: Buy-to-Let mortgages: the Mortgage Credit Directive Order 2015

CII Policy Briefing

Following the passing of the EU Mortgage Credit Directive (MCD) in February, the Financial Conduct Authority (FCA) is now in the advanced stages of implementing this into the UK. It has recently issued a consultation on how it will approach the most complex aspect of the Directive: how it will oversee Buy-to-Let Mortgages.

  • The government's legislation uses an exemption in the MCD that allows the UK to not have to apply the Directive to buy-to-let activity provided it has an appropriate framework for regulating these mortgages.
  • The government intends to use this exemption through the establishment of an appropriate framework set out in legislation.
  • Having consulted on the detail of its appropriate framework, the government published its summary of responses and the legislation on 26 January 2015, and is now taking forward implementation, particularly how the FCA will manage its powers in relation to Consumer Buy-to-Let (CBTL) activity.

Next steps: the consultation closes on 19 March 2015.  It will then publish a policy statement in June 2015 to allow the industry enough time before the rules come into force in March 2016.

Pdf icon small  View the attached briefing »

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