The FCA confirmed that firms who are registered with the regulator for consumer buy-to-let, or CBTL, will no longer require Consumer Credit Act permissions, and that business buy-to-let will not be regulated.
The legislation requires that, from 21 March 2016, a firm acting as a lender, administrator, intermediary, arranger or carrying out advisory services in relation to CBTL business must be registered by the FCA. Firms will be given at least 6 months ahead of the MCD deadline to register, with the regulator opening the registration for consumer BTL firms from this summer.
To avoid authorised firms having to register, one respondent asked whether it was possible for them to be automatically registered by the FCA and, if they are not undertaking CBTL activity, opt out. Another respondent asked for clarification on the application of the streamlined application process.
In its feedback, the FCA said a number of respondents had concerns about aspects of the proposed rules - for example, regarding the fee structure for intermediaries, and whether lenders would be responsible for checking the registration status of CTBL intermediaries.
One intermediary responding to the FCA’s proposals thought the definition of a CBTL mortgage is unclear and ‘saw risks arising from lenders, advisers, and borrowers adopting differing interpretations and firms failing to understand the scope of their responsibilities’. They were also concerned that firms might abuse the ‘business’ declaration to prevent buy-to-let consumers benefiting from the protections set out in the legislation.
The regulator responded by saying that the ‘the legislation clearly sets out the circumstances under which a buy-to-let customer is acting for the purposes of business and what must be included in the customer’s declaration that he is doing so’ - and that firms would be given the flexibility to interpret the legislative requirements.
The FCA document added:
“Firms must satisfy themselves whether a customer is a consumer or acting for the purposes of business based on facts specific to each case.“
