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A new EU Directive that would have made buy-to-let mortgages illegal has been successfully averted down after industry lobbying.

The Mortgage Directive, officially known as the 'Credit Agreements Related to Residential Property Directive' (CARRP), attempted to create a single regulatory framework governing all mortgages within the European Union.

The EU lobbied hard for this directive so that EU citizens would understand the regularity regimes when purchasing properties in different member states.

But its original text would have made buy-to-let mortgages illegal, which would have been catastrophic for the UK’s private-rented sector, according to the National Landlords Association (NLA).

The EU Commission overlooked unusual mortgage products such as buy-to-let. When sent to the European Parliament, it would have made buy-to-let mortgages illegal.

The NLA, which has lobbied hard against the Directive, welcomed the decision to completely exempt buy-to-let mortgages from the Directive, which it said would have been disastrous for landlords operating in the UK’s private-rented sector and the economy as a whole.

David Cox, senior policy officer for the NLA, said: “The NLA is very pleased with the EU’s decision to exclude buy-to-let mortgages from the Directive. We have lobbied hard to ensure the UK’s main facility for investing in property to rent can remain in place.

“The private-rented sector is currently the only growing part of the UK housing market and I am certain that a mortgage Directive including buy-to-let mortgages would have prohibited this.

“This really is a success for the NLA and its European colleagues.”

The final text is now going through the trialogue process which involves all 27 Heads of State and the European Parliament who will analyse the new text before voting on the new Directive to sign it off.


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