CBTL Registration

Further to my comments last week and the blog issued then, here is an update that I think sheds light on the process required for registration for authorised firms.

In order to register for Consumer Buy to Let selling, an authorised firm uses the Connect system.

Log in to Connect on the FCA page here. You will probably be asked to change your password if you haven't used the system yet.

You need to choose the Start New Application button and you will be presented with a  menu of choices with radio buttons. Select Consumer Buy to Let Registration and proceed to the next page.

You will be  presented with three forms to complete.

The first requires address details and provides you the opportunity to validate your standing details.

The second is the registration form which asks if you want to register for CBTL and then on a second page asks what  you are, (Select Acting as CBTL advisor unless you plan to do other things.)

The third form is a declaration.  As with the Consumer Credit Licence,you will need to confirm that you have printed off and signed the declaration, so don't forget to do so!

You are then ready to submit and once you get into that you will be  asked to pay £100 by card as part of the submission process.

Pay, submit, get confirmation that you are registered and the job is done.

The next blog will be an attempt to define CBTL in English with examples!

Consumer BTL and on and on,,,

The Nationwide notice today has prompted me to say a bit about Consumer BTL and what has to happen in firms if they think their is a risk that they may be  advising on them.

With effect from 21st March next year some BTLs, consumer BTLs will become regulated. The FCA has indicated that it requires firms to register if they wish to operate in  this market and have recently provided the following flow chart to assist :

The document is a bit small here but the link to it is on this page. However , to save time the following applies if you are already authorised for regulated mortgages.

If you already have Part IV permissions (and if you are a mortgage broker you will have) so if you think that you might need permission to sell CBTL mortgages then you will need to register this via a form on Connect ( and pay £100 at the time of application), That is more or less all you will have to do. This is the basis behind the Nationwide comment about registering for the right permission.

The question then comes down to whether you think you might sell CBTL mortgages. I think that it is highly likely that if you do BTLs at some point within the year you are going to be facing at least 1 CBTL, Besides, even if you think the applicant does not fall into the CBTL category it is going to be up to the lender to decide which path they choose and if you don't have the permission you could lose a case.

In a word, pay the £100 and register and then the matter is sorted for you whatever the FCA and the lenders throw at you. I haven't looked on Connect as I am not a user but I would imagine that the form is one there right now or will soon be. It was promised at the end of summer and I guess from the dismal rain we have had recently, that is about now.

In the next blog I'll explain a bit about what is and what is not CBTL as far as has been publicised recent;y.

Lifetime Mortgages and the Mortgage Credit Directive

I have received a number of questions recently about Lifetime mortgages and how they will fit into or be exempted from the Mortgage Credit Directive. This short blog is intended to provide a little advice on the matter.

Lifetime mortgages will generally be exempt from the MCD but because the FCA definition of a Lifetime mortgage is broader than the MCD definition, there may be circumstances where a Lifetime Mortgage (defined by the FCA) will fall under MCD rules. An example of such a product would be one where capital might be required to be repaid during the term of the mortgage. Such a product would fall under MCD rules and an ESIS (European Single Information Sheet) will have to be issued instead of an FCA tailored Lifetime KFI (as current). HOWEVER. even in such circumstances where the product is under MCD the FCA will insist that the additional safeguards ( qualification and enhanced advice) continue to apply ( over and above the MCD) . The FCA will also require additional disclosure over and above the ESIS to fulfil the UK regulatory requirements for all Lifetime Mortgages. This document would explain the risks associated with such mortgages as this is missing from the ESIS.

What does that all mean then?

1. Current Lifetime Mortgage Products which satisfy both the FCA and MCD definition of Lifetime will be exempt from MCD so that the usual Lifetime KFI can be issued etc. rather than the ESIS.

2. It is foreseeable that products may be designed in the future that will satisfy the definition of FCA Lifetime but fall outside that of the MCD. These products will be covered by the MCD and require an ESIS to be issued rather than a KFI. However, in such circumstances the FCA will expect firms to provide additional information to ensure that clients have received all the information set pout in the Lifetime KFI, albeit in the form of an ESIS and another document.

3. The FCA has decided not to bring its definition in line with MCD based on feedback by providers on the complexity of the UK products.

We have a good six months to go so no doubt it the mud will clear by then!