EU Mortgage Directive: Committee criticises Government over buy-to-let
18 November 2014
The House of Lords EU Economic and Financial Affairs Committee has today written to the UK Government expressing its concerns about the ramifications of the EU Residential Property Directive for the UK buy-to-let market.
- Letter: EU Committee Chairman to Andrea Leadsom MP, Economic Secretary, HM Treasury, on the Residential Property Directive, 18 November 2014
- Scrutiny Work: Residential Property Directive
The Committee scrutinised the Directive in detail between 2011 and 2013, when political agreement on the Directive was reached. During the course of those negotiations, the UK Government secured an exemption from the provisions relating to buy-to-let lending. However, the Committee recently received an update from the Economic Secretary to the Treasury, Andrea Leadsom MP, stating that Member States availing themselves of such an exemption were required to ensure that an appropriate domestic framework was applied to buy-to-let lending. The Minister stated that this would only apply to a small minority of transactions.
In its reply, the Committee expresses regret that the Minister has not met its concerns about the potential impact of the requirement on the UK market. The Committee points out that the Minister fails to provide any figures on the numbers likely to be affected, in particular among those forced into buy-to-let lending through inheritance of a property or an inability to sell.
The Committee expresses concern that such an important detail was not identified during the course of negotiations, in particular given the importance of the mortgage market to the UK economy. It invites a response by 2 December.