By Henrietta Billings - 18th July 2005
The EU is to examine ways to increase competition in Europe’s mortgage credit market, the European Commission said on Tuesday.
Brussels has launched a consultation on mortgage credit in a bid to start debate about how to free up “more choice and better value for EU consumers.”
European Internal Market Commissioner Charlie McCreevy promised that if “there prove to be areas where we should act, we will not hesitate to do so.”
“A home is the biggest purchase most people make in their lifetime and the mortgage credit markets are a very significant part of the EU economy,” he said.
“More cross-border activity and competition in the EU mortgage market could increase choice, reduce costs and leave more money in people's pockets at the end of the month.”
Most of the EU’s home loans – worth 44 per cent of Europe’s GDP – are with local or national lenders.
Europe’s consumers seem to be wary or foreign lenders, and lenders have failed to move into new markets outside national borders.
The commission is to examine different legal rules and varying standards to value property or to check on credit worthiness.
EU free market chiefs are to consider EU standards for mortgage information, rules on interest and fees.
A possibility could also be proposals to create a “new kind” of mortgage lender that is not subject to the full range of EU banking rules.
The commission’s consultation will end on November 30 2005.
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