Council of Mortgage Lenders Publish Buy-To-Let Statement of Practice
The Council of Mortgage Lenders (CML) has published a statement of practice (statement), which outlines existing good practice and the overarching principles that CML members should follow in relation to buy-to-let (BTL).
The statement is intended to ensure that BTL borrowers and lenders understand their respective responsibilities. Broadly, it gives guidance on:
- Lenders’ BTL internal lending strategy and policies. These policies should consider limits and controls on lending, including lending against higher-risk properties, lending to particular customer types and the types of higher-risk tenants or tenancy arrangements deemed acceptable;
- The information that lenders give customers when marketing BTL products, and the wording that can be used by lenders to warn borrowers of the risks and consequences of BTL and the non-payment of BTL mortgages;
- The responsibilities of BTL customers. Lenders will not advise upon, but will expect customers to understand and comply with, their legal responsibilities as a landlord, including health and safety compliance, and licensing or registration requirements;
- Lenders’ responsibilities for implementing robust affordability assessments, to deal with those who fall into financial difficulty, fraud prevention and complaints handling.
This statement applies to all members of the CML and has been endorsed by the Residential Landlords Association, the Association of Residential Letting Agents, the Association of Mortgage Intermediaries, the Intermediary Mortgage Lenders Association, and the British Bankers Association (BBA).
BTL lenders’ membership of the CML is conditional on agreeing to comply with this statement of practice and a failure to adhere to the statement could lead to revocation of membership. The statement should help bring about clarity and a consistency of approach in the BTL market which covers a broad spectrum of borrowers.