Recent debate surrounding the buy-to-let (BTL) market left doubt in many minds as the European Union (EU) was close to banning loans to landlords looking to invest in BTL properties.
In an attempt to foster a universal regulatory framework for the entire EU mortgage market, the initial proposals would have put a stop to the current growth in the BTL market.
However, thanks to early and ongoing work by the RLA, in conjunction with the British Property Federation (BPF) and other industry groups, buy-to-let mortgages have been exempted completely from early proposals that threatened to render mortgage loans in Britain and Ireland illegal.
The RLA is exceptionally pleased with the outcome as a testament to the importance of the private rented sector (PRS) within the national economy and how BTL properties are integral to the sector. The outcome is another substantial victory to add to the collection that the RLA campaigns can hold claim to.
The RLA has been engaged with the EU over these proposals since November 2012 and has been challenging proposals that would have removed zero VAT rating on all materials except for the most high rating energy-efficient materials in a bid to improve housing standards across the continent. Experts argued, however, that these proposals would do the opposite and lower the choice and availability of housing stock for the people that need it the most.
The new decisions will require lenders to provide those seeking out loans with the numbers of worst-case-scenarios, though they may not apply to the circumstances under which the property will sit.
The European Parliament has recently stated
“Anyone signing up for a mortgage in the EU should receive comparable information about the products available, and understand the total cost and long-run financial situation and take account of their prospects and possible downturns.”
Some have argued that the EU’s insistence on trying to harmonise member’s mortgage markets will serve to confuse many who are not interested with mortgage rates – however high or low – in other countries.
The directive text is expected to be rolled-out and enforced within the next two years.
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