A proposal to regulate buy-to-let mortgages look set to be dropped from the European mortgage directive.
The move had caused an outcry with the suggestion that buy-to-let mortgages should be treated as residential mortgages, with borrowers assessed in the same way – on earnings and not on rental income.
As with residential mortgages, buy-to-let lenders would have been regulated by the FSA, and borrowers would have had access to the Financial Ombudsman.
However, following negotiations in Brussels, Tory MEP Vicky Ford said it has now been agreed that the proposal will be dropped.
She said: “We are back in a good place on buy-to-let.”
However, some types of mortgages could be banned, where lenders require a guarantor’s savings account. Such deals could include Barclays’ new Family Springboard mortgage.
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