CML to introduce buy-to-let ‘statement of practice’
The Council of Mortgage Lenders said: “We recognise that both lenders and landlords taking out buy-to-let mortgages have responsibilities to ensure that the market continues to work well.
“In recognition of our view that there are responsibilities for lenders and borrower landlords, and to reinforce current good practice, we have been working closely with members on our statement of practice for buy-to-let lending.”
The statement of practice will document how lenders need to provide ‘fair, clear and not misleading’ information, with clear statements on fees and charges, monthly repayments and the overall cost calculation. This will be in line with both the existing ‘key facts illustration’ and the proposed European standardised information sheet.
The document will also state that lenders must robustly assess mortgage affordability, allowing for conditions in the rental market, the impact of future rate rises, rental voids and arrears, and other costs.
The CML will also document how landlords must comply with legal requirements for letting property, treat their tenants fairly, maintain and insure the property adequately, and accept the commitments associated with taking out a mortgage.