PERG 4.7 Entering into a regulated mortgage contract

Article 61(1) of the Regulated Activities Order makes entering into a regulated mortgage contract as lender a regulated activity.

The Regulated Activities Order contains an exclusion which has the effect of preventing certain activities of trustees, nominees and personal representatives from amounting to entering into a regulated mortgage contract. There is also an exclusion for local authorities and their wholly-owned subsidiaries.21 These are1 referred to in PERG 4.10 (Exclusions applying to more than one regulated activity).In addition, there1are 3 exclusions 3 where both the lender and borrower are overseas, which is referred to in PERG 4.11 (Link between activities and the United Kingdom) and related to consumer buy-to-let lending, which is described in PERG 4.10B3.

A person who provides credit to a borrower under a regulated mortgage contract will enter into a regulated mortgage contract, even if the lending obligations under that contract are subsequently transferred to a third party. Consequently, a person who acts as a so-called 'correspondent lender' in the mortgage market will need to seek authorisation.