| |
Major Site Upgrade in Progress |
 |
|
 |
|
Shahla
Money Managing Guru
Joined: 13 Nov 2004
Posts: 3324
Cash Points ££ 126163.28
|
|
|
 |
|
 |
|
 Posted: Sat Mar 24, 2007 6:17 am Post subject: UK Housing Market - Could CCA 2006 cause the downfall of Buy |
 |
|
|
 |
|
 |
|
|
|
|
UK Housing Market - Could CCA 2006 cause the downfall of Buy to Let ?
Lee Tillcock, Editor of Business Moneyfacts comments: “The last year has seen a raft of legislation impacting on the buy-to-let sector, with more new rules and regulations still to be implemented. So far the new regulation has covered areas to protect both the landlord’s and tenant’s rights. However lenders and borrowers should also be aware that The Consumer Credit Act 2006 (CCA 2006) presents potentially far more serious issues when its provisions begin to take full effect next April.
“As a general rule, buy-to-let (BTL) lending is unregulated. However, it risks becoming CCA regulated once the £25,000 financial limit is removed in April
“In principle it has been argued that a landlord who buys just one or two properties to let may not be considered to be entering into a business transaction, but rather making a personal investment. If that was the case then the business exemptions would not apply and therefore the transaction would fall under the CCA regulations.
“The rules regarding business exemption state that loans which exceed £25,000 will not be regulated if entered into solely or predominately for the purposes of a business. Clearly if the former interpretation was applied then the implications to the buy-to-let lending industry would be immense. The growing numbers of stories in the trade press have highlighted these worries with the end of the buy-to-let sector offered as the worst possible case scenario.
Ray Boulger has recently raised his concerns on the issue of the new Act, saying: “If implemented in its current form, it will crucify our buy-to-let market by imposing requirements such as banning interest-only mortgages.” Paul Rockett, TBMC believes common sense will prevail, stating that: “The good news is that the DTI has consistently maintained that it does not intend to regulate buy-to-let and that buy-to-let will fall within the scope of the business exemption. Also the DTI has become more and more precise about this point, making it very unlikely that the fears mentioned above will come to pass.”
“The general lack of clarity surrounding this issue means that it would not be clear who would and who would not be caught by this law. What constitutes a business and what does not is the key to this conundrum. The people that decide are in the Department of Trade and Industry (DTI). Thankfully, it appears that common sense may have prevailed as the DTI recently announced an amendment that should ensure that lenders are not faced with CCA regulation of loans to buy-to-let borrowers with a small number of properties.
“The Council of Mortgage Lenders has called for lenders to challenge the DTI and Government on the changes. Whatever the outcome of the discussions, legal uncertainty is at the least unsettling and potentially very expensive for lenders, and subsequently consumers alike. The Government needs a very healthy private landlord market and whilst regulation has come in to protect tenants, stopping investment in commercial enterprise (which buy-to-let is) would be counter productive.
“The exact rules and effect of the CCA 2006 need to be made clear and quickly, before too much speculation about the adverse consequences puts doubt into potential landlords’ minds. Simply, it cannot include banning interest only mortgages, as this would be sure a sure fire way to collapse the BTL industry. But without the full facts the industry continues to speculate, possibly turning something relatively harmless into a whirlwind of confusion. With landlords, lenders and tenants already contending with the raft of new regulation, let’s hope this latest Act is clarified sooner rather than later.”
By Lee Tillcock,
http://www.Moneyfacts.co.uk |
|
|
|
|
|
|
 |
Online Finance Tools & Calculators |
 |
| Credit Score Calculator |
Easy to use online Credit Scoring tool - Calculate your credit score now online for FREE ! using the Moneyforums.co.uk credit scoring tool. Also TEN Tips on improving and mainting a good credit rating ! |
|
| Quick Health Calculator |
Easy to use quick health calculator to help you get started on the path to fitness. Calculates your body mass index (BMI). |
|
| "When will I die ?" Calculator |
Calculate when will you die based on your current life style and then more importantly what you can do about extending your lifespan ! |
|
| Mortgage Calculator |
Easy to use online Mortgage calculator tool - Calculate how long it will take to pay off your mortgage and what your monthly repayments will be as well as interest charged per month per each year. |
|
| Savings Calculator |
Use the flexible savings calculator to estimate the amount of interest you would earn given a level of monthly savings, with many optional settings. |
|
| UK Tax Calculator |
Check your tax and NI liability using this easy to use online tool. Outputs, Tax, Ni, Net pay and gross pay on an annual, monthly and weekly basis, also estimates your tax burden and the number of days a year you work for the tax man ! Plus lots of tax saving tips. |
|
|
 |
|
 |
|
Money
Forums Guides |
|
| Credit
Card Stoozing |
The
following guide explains the basics of credit
card stoozing in a step by step basis. |
|
| Discount
Vouchers |
Online
discount vouchers giving upto
50% off in stores such as Dixons,
Tesco, Avon, Currys, Boden and more. Many
of the vouchers are time limited - So check
back regularly |
|
| Money
Saving Guide |
Guide
to saving money on household bills & personal
finances - Start saving thousands of £'s
every year TODAY ! |
|
| Savings
Tree |
A
guide to Savings Accounts, from Cash ISA's to
Regular Savers to Premium Bonds, all explained
in an easy to understand manner. |
|
|
Users
Groups | Profile
| Messages
| FAQ | Sponsers
& Links | Member
list | Recommend this site | Top Money Saving Sitee
© 2004 - 2007 Moneyforums.co.uk / Market Oracle Ltd - Asserts copyright on all topics & posts made on this site. Moneyforums are open forums, and thus posts are NOT endorsed by Moneyforums.co.uk / Market Oracle Ltd . Any and all information provided within the Website is for general information purposes only and nor is or shall be deemed to constitute, financial or other advice. We recommend that independent professional advice is obtained before you purchase any product and/or service. All tools and guides are provided as is for general information purposes only.
|
|
|
