An amendment was made to Clause 10.2 of the CML lenders' handbook for England and Wales, Scotland and Northern Ireland on 1 February 2016. 

  • The amendment is designed to reflect the introduction of a requirement, as the result of the Mortgage Credit Directive, for mortgage customers to have a ‘reflection period’, of at least seven days before accepting a mortgage offer. Recital 23 and Article 14(6) of the Directive set this out. The customer can bring that reflection period to an end earlier, by accepting the mortgage offer.
  • The wording intends to clarify that, in cases where the mortgage lender does not already require a formal acceptance from the borrower, that the current practice of the conduct of borrower in drawing down the loan, acts as acceptance of the mortgage offer, and creates the contract; this in turn, in cases where the drawdown happens before the end of the reflection period, confirms that the customer has brought the reflection period to an end by their conduct, which Recital 23 expressly allows for.
  • Lenders will explain the concept of the reflection period in information provided to prospective borrowers, for example, in the mortgage illustration, mortgage offer and mortgage terms and conditions. Many lenders are either allowing a 7-10 day reflection period (10 days to account for postage time) or aligning the reflection period with the existing offer expiry date (which can be up to 6 months). 

We have consulted with the legal sector and the financial services regulator (FCA) on this amendment. 

For more details of changes download the summary of amendments documents below.

If you require certainty as to the format of part 1 in force at any given time it is recommended that a cross check is made against the Conveyancing Handbook (published by Law Society Publishing) which annexes the CML lenders' handbook. This particularly applies if your query relates to the Professional consultant certificate. 

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