Consumer Buy to Let

As a result of the government’s implementation of the Mortgage Credit Directive (MCD), there have been changes to how buy-to-let activity is regulated.

The FCA are adding a standard requirement/ limitation to the permission of the Consumer buy-to-let (CBTL) mortgage and consumer credit firms (holding certain regulated activities) that are not registered for CBTL mortgage business. This is displayed on the Financial Services Register and specifies that they are unable to carry on CBTL activity.


Advising on, arranging, lending and administering consumer buy-to-let (CBTL) mortgages is subject to a legislative framework, as set out in the MCD Order 2015.The FCA are responsible for registering, supervising and taking action where necessary against firms carrying out these CBTL activities.

The MCD Order defines a CBTL mortgage contract as:

A buy-to-let mortgage contract which is not entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower.


The legislation gives a series of circumstances that would constitute a buy-to-let customer acting for the purposes of business, and therefore taking them outside the legislation. These include where the customer:

  • uses the mortgage to purchase a property, intending to rent it out
  • has previously purchased the property intending to let it out and neither they nor their relatives have lived there
  • already owns another property that has been let out on a rental basis


The legislation also enables a firm to presume that a customer is acting for his/her business if the agreement includes a declaration from them stating this fact, and that they understand that they are forgoing protections offered by the legislation to consumers, unless the firm has reasonable cause to suspect that this is not the case.