UK mortgage lenders welcome European buy to let vote.
UK mortgage lenders are welcoming the progress made on the proposed European mortgage directive.
The Parliament’s ECON committee voted to back the UK’s position on buy to let mortgage lending agreeing that it should be excluded from the proposed directive.
The ECON committee are also in support of measures that mean UK lenders may for the next 5 years continue to use existing paperwork to disclose mortgage product details to consumers.
The ECON vote is seen as a welcome endorsement of the UK position strongly lobbied by the Council of Mortgage lenders, the FSA, the Treasury and UK MEPs.
Alarm bells have been raised however regarding the ambiguous wording in the mortgage directive of proposed new rules about savings accounts linked to mortgages.
Products such as Lloyds Lend a Hand could be banned under the new rules along with guarantor mortgages which are becoming an important tool for first-time buyers.
Under the directive UK lenders could also be forced to link their standard variable rates with an external indices such as the BoE based rate. However the CML are seeking further clarification on this point, as UK lenders are unhappy with this point preferring to offer independent standard variable rates .
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