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CML unveils B2L statement of practice

Sarah Davidson

April 7, 2015

According to the CML 90% of the industry are already on board with the statement, which details how lenders need to stress test for rental voids and when mortgage interest rates increase down the line.

The council said its statement of practice is designed to cover any residential buy-to-let lending not under Financial Conduct Authority framework to comply with the Mortgage Credit Directive.

Paul Smee, CML director general, said: “Lenders know how important it is to have a transparent mortgage market, in which borrowers can have confidence, and where lending policy is both responsible and clearly understood.

“The new buy-to-let statement of practice reflects what responsible lenders already do and offers a clear explanation of how buy-to-let lenders operate.

“We hope it will make a valuable contribution to understanding the buy-to-let lending environment.”

The document details how lenders should ‘take extra care’ when taking on applicants with an adverse credit history, while it adds that lenders shouldn’t incentivise their own staff or intermediaries based on the volume of completions.

Bob Young, chief executive of Fleet Mortgages, said: “We have been particularly vocal on the need for the entire lending community to maintain responsible lending practices, especially as the buy-to-let sector grows and new entrants come to market.

“By developing and maintaining this statement of practice it should help benchmark all buy-to-let lending activity in this marketplace, provide a level-playing field and hopefully raise standards right across the board.

“The CML should certainly be applauded for its work in this area as it sets a line in the sand for how existing – and new – buy-to-let lenders operate.”

He added: “If all stakeholders within a buy-to-let transaction are clear from the very start about what is expected of them, and they have all the information they need, then this should hopefully increase overall confidence in the market and develop a greater degree of best practice.”


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