Following a jubilant announcement from Tory MEP Vicky Ford, banks and building societies consider the proposal dead and buried.
Lenders, politicians and civil servants wheeled and dealed in the European Parliament for months before finally agreeing to leave buy to let loans out of the new consumer protection laws.
Buy to let lending was indirectly caught in the directive as lawmakers considered investment mortgages personal loans rather than business borrowing.
British lenders argued that this was not the case and buy to let was commercial lending in the UK.
The British buy to let market differs from that in most European countries as private landlords make small-scale investments in the UK rather than following the European model of institutions making large investments.
The result would have left landlords having buy to let lending applications treated as residential mortgage loans – and that would have stopped the market dead as deals would have been considered on the landlord’s income rather than rental income generated by the property.
The mortgage directive has seen more than a year of negotiations as politicians and eurocrats heaped more than 1,000 amendments on the original draft document.
The directive has missed several key votes as rows over the smallest of amendments held up progress through the European Parliament.
No date has been set for the next round of voting and the rules are unlikely to come in to force for two years or more.
Britain won and lost some other amendments as well.
Europe refuses to accept mortgage deals that link mandatory bank savings accounts and insurance to home mortgages because they limit choice.
Barclays and Lloyds Banking Group offer these loans, but they face a ban.
Guarantor mortgages are accepted by the directive, while offset mortgages are outside the scope of the regulations.
