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. These are referred to in PERG 4.10 (Exclusions applying to more than one regulated activity).In addition, thereare exclusions 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 4.10B.

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.