Buy-to-let lenders have signed up to a new code of practice in what they claim is a bid to provide clarity about how they operate.
More than 30 lenders – collectively representing nearly 90% of the BTL market – have already adopted the new guidelines. Umbrella organisation the Council of Mortgage Lenders (CML) said it expected all its 128 members to adopt them before the end of the year.
The statement of practice covers issues such as lending principles, the information given to customers, complaint handling and lenders’ responsibilities on affordability.
“Lenders know how important it is to have a transparent mortgage market, in which borrowers can have confidence, and where lending policy is both responsible and clearly understood,” said CML director-general Paul Smee.
“The new BTL statement of practice reflects what responsible lenders already do and offers a clear explanation of how BTL lenders operate. We hope it will make a valuable contribution to understanding the BTL lending environment.”
Andrew Baddeley-Chappell, of Nationwide Building Society, one of the lenders that has already signed up, said: “As the private rented sector continues to expand, it is important that the market focuses on adhering to a set of key principles that concentrate on doing the right thing for both tenants and landlords.
“By focusing on quality and prudency, these principles highlight a market that is committed to sensible and sustainable lending practices, and must remain so. In a fast-evolving market, it is important that the statement of practice also remains up-to-date and relevant.”
The statement has been given the backing of the Residential Landlords Association, the Association of Residential Letting Agents, the Association of Mortgage Intermediaries and the Intermediary Mortgage Lenders Association.
Chris Parker, of the Nottingham Building Society, said: “We pride ourselves on transparency and clear explanations of obligations, so for us it was a no-brainer to sign up to the statement of practice.
“We welcome the statement, which can only help build borrower confidence and help them understand the BTL landscape, and are pleased to have signed up.”