The government has said it will do the ‘minimum’ required to comply with new EU mortgage rules, which the Law Society says may disrupt the conveyancing market by forcing lenders to give borrowers more time to consider loans.

The Treasury has been tasked with implementing the EU mortgage credit directive (MCD) by March 2016.

Brussels wants to offer more protection to consumers taking out mortgage loans by giving them extra time to consider loan offers, but the changes have been criticised by representative groups, including the Law Society and the Council of Mortgage Lenders.

The government last week pledged to maintain the existing regulatory framework and put in place the ‘minimum requirements’ to meet the UK’s legal objectives when it transposes the directive into domestic law.

In an impact assessment, the Treasury said it had seen no evidence that MCD offers extra benefits to UK consumers.

‘It would remove valuable consumer protections, place significant costs on industry and replace a familiar and robust regulatory system, designed to meet the requirements of the UK market, with a completely new framework,’ it stated. ‘For this reason the government is proposing to build on the existing UK regulatory regime in our transposition of the MCD, rather than copy out the directive into UK legislation.’

The Financial Conduct Authority is consulting separately on how to implement the changes in practice and expects to have guidelines in place by the end of March.

Current FCA proposals are that the MCD will require lenders to make ‘an offer binding on the creditor’ to consumers, along with a reflection period of at least seven days during which the consumer will have sufficient time to compare offers, assess their implications and make an informed decision.

Once a firm is satisfied it is willing to lend money to the consumer, it will need to make its offer binding. The precise trigger for making the binding offer is left for lenders to establish, but could be when it has received the certificate of title from the conveyancing solicitor.

The Council of Mortgage Lenders has said the MCD provides ‘little if any benefit’ to the UK mortgage market or UK consumers.

In its response to the government’s consultation, the CML warned of ‘fundamental changes to the sales process that will confuse consumers’.

The Law Society has expressed particular concern about using the certificate of title to make the offer binding, as it would be far too late in the buying process to enable the consumer to change mortgage provider.

The Society explained this would risk putting consumers into a more difficult position than without the reflection period because they are likely to have entered into binding contractual relationships.

It added: ‘The issuing of the formal mortgage offer, provided that it does not contain conditions that are within the control or whim of the lender, should constitute the binding offer and this should trigger the reflection period.’