Q&As

An individual (the owner) who is not resident in the UK owns some mortgaged properties on a buy to let basis in the UK. A lender based overseas wishes to lend to a close relative (who is also based overseas) of the owner and to place a charge over some of these properties. As the owner and relative are individuals, does the Consumer Credit Act 1974 need to be considered? Would the loan otherwise be regulated in the UK? Can a charge be placed with the owner's consent?

read titleRead full title
Published on LexisPSL on 19/02/2018

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • An individual (the owner) who is not resident in the UK owns some mortgaged properties on a buy to let basis in the UK. A lender based overseas wishes to lend to a close relative (who is also based overseas) of the owner and to place a charge over some of these properties. As the owner and relative are individuals, does the Consumer Credit Act 1974 need to be considered? Would the loan otherwise be regulated in the UK? Can a charge be placed with the owner's consent?

Under section 19 of the Financial Services and Markets Act 2000 a person cannot carry out a regulated activity, or purport to do so, in the UK unless they are either an authorised person (ie authorised by the Prudential Regulation Authority and/or the Financial Conduct Authority (FCA)), or an exempt person (eg by being an appointed representative). For an overview of the regulated activities regime in the UK, see Practice Note: What are regulated activities?

Activities are regulated if they are of a ‘specified kind’ (ie specified by the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO 2001)) which is carried on by way of business. For more information about what it means to carry on a regulated activity by way of business in the UK, see Practice Notes: What does 'by way of business' mean? and Territorial scope of the general prohibition.

The regulated activities contained in the RAO 2001, SI 2001/544 include activities relating to consumer credit and regulated mortgage contracts (RMCs), including entering into a regulated credit agreeme

Related documents:

Popular documents