HM Treasury has published the response to its September 2017 consultation on the proposed Goods Mortgages Bill and has announced that it is no longer planning to introduce new legislation on this subject at this time.

This follows a review of the existing legislation governing creation of security over goods by individuals which began in 2014. In a 2016 report, the Law Commission concluded that the current Bills of Sale Acts were archaic and should be repealed in their entirety. A draft of the proposed replacement legislation, the Goods Mortgages Bill, was published in September 2017. The Bill aimed to give greater protection to borrowers and innocent purchasers of goods, simplify the process for registration of security over goods and remove restrictions on lending to sophisticated individuals.

The government was intending to fast track the Bill through Parliament, however it has now said that due to concerns voiced in the most recent consultation it will no longer seek to pass the Bill. Reservations raised include the small and reducing market for Bills of Sale lending, a worry that the Bill could encourage lending to vulnerable individuals, and responses suggesting that the Bill did not offer enough protection to consumers.

Other responses stated that reform of the Bills of Sale Acts should be part of a broader reform of securities law, with other commentators calling for a review of other aspects of the law on secured transactions.


Rebecca Jones