Background to the regulation of regulated mortgage contracts and home finance transactions

The regulation of regulated mortgage contracts as well as home reversion plans, home purchase plans and regulated sale and rent back agreements (together referred to as ’home finance transactions’) came about at different points in time. HM Treasury announced its intention to regulate mortgage lenders in 2000 and revised its proposals in December 2001 to include mortgage intermediaries. On 31 October 2004 (a date known as M Day), lenders and intermediaries of regulated mortgage contracts (RMCs) became regulated. There followed the enactment of the Regulation of Financial Services (Land Transactions) Act 2005 (RFS(LT)A 2005), which enabled the financial conduct authority (FCA) and its predecessor, the Financial Services authority, to regulate activities that are similar to those that were already regulated in relation to RMCs but that involve the provider acquiring land rather than simply providing finance for its purchase by the homeowner. As a result, the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO) was