Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK Housing Market - Could CCA 2006 cause the downfall of Buy to Let ?

Housing-Market / Buy to Let Mar 21, 2007 - 05:29 PM GMT

By: MoneyFacts

Housing-Market Lee Tillcock, Editor of Business Moneyfacts comments: “The last year has seen a raft of legislation impacting on the buy-to-let sector, with more new rules and regulations still to be implemented. So far the new regulation has covered areas to protect both the landlord’s and tenant’s rights. However lenders and borrowers should also be aware that The Consumer Credit Act 2006 (CCA 2006) presents potentially far more serious issues when its provisions begin to take full effect next April.

“As a general rule, buy-to-let (BTL) lending is unregulated. However, it risks becoming CCA regulated once the £25,000 financial limit is removed in April


“In principle it has been argued that a landlord who buys just one or two properties to let may not be considered to be entering into a business transaction, but rather making a personal investment. If that was the case then the business exemptions would not apply and therefore the transaction would fall under the CCA regulations.

“The rules regarding business exemption state that loans which exceed £25,000 will not be regulated if entered into solely or predominately for the purposes of a business. Clearly if the former interpretation was applied then the implications to the buy-to-let lending industry would be immense. The growing numbers of stories in the trade press have highlighted these worries with the end of the buy-to-let sector offered as the worst possible case scenario.

Ray Boulger has recently raised his concerns on the issue of the new Act, saying: “If implemented in its current form, it will crucify our buy-to-let market by imposing requirements such as banning interest-only mortgages.” Paul Rockett, TBMC believes common sense will prevail, stating that: “The good news is that the DTI has consistently maintained that it does not intend to regulate buy-to-let and that buy-to-let will fall within the scope of the business exemption. Also the DTI has become more and more precise about this point, making it very unlikely that the fears mentioned above will come to pass.”

“The general lack of clarity surrounding this issue means that it would not be clear who would and who would not be caught by this law. What constitutes a business and what does not is the key to this conundrum. The people that decide are in the Department of Trade and Industry (DTI). Thankfully, it appears that common sense may have prevailed as the DTI recently announced an amendment that should ensure that lenders are not faced with CCA regulation of loans to buy-to-let borrowers with a small number of properties.

“The Council of Mortgage Lenders has called for lenders to challenge the DTI and Government on the changes. Whatever the outcome of the discussions, legal uncertainty is at the least unsettling and potentially very expensive for lenders, and subsequently consumers alike. The Government needs a very healthy private landlord market and whilst regulation has come in to protect tenants, stopping investment in commercial enterprise (which buy-to-let is) would be counter productive.

“The exact rules and effect of the CCA 2006 need to be made clear and quickly, before too much speculation about the adverse consequences puts doubt into potential landlords’ minds. Simply, it cannot include banning interest only mortgages, as this would be sure a sure fire way to collapse the BTL industry. But without the full facts the industry continues to speculate, possibly turning something relatively harmless into a whirlwind of confusion. With landlords, lenders and tenants already contending with the raft of new regulation, let’s hope this latest Act is clarified sooner rather than later.”

By Lee Tillcock,
http://www.Moneyfacts.co.uk

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in