Consumer BTL Mortgages Current Position

Under the Mortgage Credit Directive, firms wishing to lend, administer, intermediate, arrange or provide advisory services in relation to Consumer BTL from 21 March 2016 will need to be registered by the FCA to do so. The FCA will start accepting applications later this summer.  HOWEVER, if you are already authorised the following will apply.

Firstly, you cannot do nothing. If you take no actiomn then a limitation will be  placed on your permissions that will prevent you from doing Consumer BTL mortgages. The FCA states,

As set out in legislation and CP15/3, the streamlined application process will only be available to those firms holding Part 4A permissions or interim permissions for consumer credit, and where a previous CBTL registration has not been revoked. This streamlined online process will only require firms to confirm that they wish to register (whether as a lender, administrator, adviser or arranger) and pay the relevant fee. When we begin accepting registrations, firms holding Part 4A permissions will be able to follow this process using a standalone online form through Connect. 


For clarity, if you are an existing mortgage broker you will hold part 4 permissions and so the streamlined applictaion process will apply to you. You wil lbe  able to make this application later this summer (their words not mine) through the Connect system and yes, it looks like you will have to pay a fee.


Please note: this applies to consumer BTL mortgages and not to commercial. However, I suspect that it will be  difficult in certain circumstances to prove that a BTL is not a CBTL and so I don't think that firms have much option but to register.

The good news however is that advising on BTLs and CBTLs will be taken out of Credit Broking under Consumer Credit Act  from 21st March 2016 and thus commercial BTLs will remain unregulated.

Action required of you: Watch this Blog and look out for FCA emails about this towards the ends of summer. Start saving for the fee!

A Note about Co Operating with your regulator

In the regulation round up issued in June there is a section of co-operation with the regulator. The FCA makes the point that , in its own words from Principle 11

a firm must deal with its regulators in an open and co-operative way, and must disclose to the appropriate regulator anything relating to the firm of which the regulator would reasonably expect notice.

This means that it is incumbent upon a firm to notify the regulator of any matters arising in the firm that could cause concern. So firms should notify the FCA at  the earliest opportunity if they identify any potential or actual misconduct, significant risks, or anything that might affect their ability to comply with FCA rules and regulations.

This reminded me of a a compliance visit carried out on a firm a few months ago now where it came to light that a firm had been struck off a lender panel. The FCA view was that, notwithstanding the fact that the lender will have reported this already to the FCA, the firm should have also reported it.

That is some thing to consider if any firms out there have been struck off by a ledner and have  not yet advised the FCA. This is something that should be  done. in these cases, better late than never.