Parliament made the Mortgage Credit Directive Order 2015 (SI 2015/910) on 25th March 2015. Copy available here MCDO.

Generally, the MCDO will comes into force on 21st March 2016, but it will be in force from 20th April 2015 for the purposes of applications for Part 4A permission, or entry on the register of consumer buy-to-let mortgage firms.

The MCDO will radically alter the system of consumer credit regulation to fit with EU law. In particular, consumer credit agreements which are secured by a second charge will now fall within the definition of a “regulated mortgage contract”. This means that second charge lending will be removed from the scope of the consumer credit regulatory regime and brought into the scope of the mortgages regime regulated by the FCA.

Further, while most secured buy-to-let lending for business purposes will be exempt from regulation as an ‘investment property loan’, firms undertaking ‘consumer buy-to-let mortgage’ business will need to apply to enter a register maintained by the FCA (although Part 4A permission is not required). There will be various requirements such firms need to comply with, but these are less onerous than the full regulatory framework.