EU Commission releases green paper on ‘Euromortgage’ |
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Sun, 24 Jul 2005 08:35
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BRUSSELS: The European Commission is looking into a new pan-European mortgage deed titled 'Euromortgage' as it looks to speed up the process of acquiring properties in EU member countries. A Green paper to this effect was released on Tuesday.
Announcing this step, Charlie McCreevy, EU Single Market Commissioner, 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." He also said that since a home is the biggest purchase most people make in their lifetime, the EU was working towards overcoming legal barriers for acquiring any property across the continent. Homebuyers would benefit, as the European Central Bank’s interest rate is only two percent, while the Bank of England's rate currently stands at 4.75 percent.
"Today we are launching a consultation to assess whether Commission action can help to bring about improvements in choice and value in the EU mortgage market," Mr. McCreevy said.
However, this step was termed as a disappointment by the Council of Mortgage Lenders which felt that the Green paper had spent a lot of time on standardisation, "From a UK perspective, the heavy focus on issues such as the standardisation and regulation of mortgage information and advice could actually cause huge disruption and higher costs for UK consumers and lenders alike," the CML said. It added that it was disappointed that the Green Paper did not define what the Commission meant by "an integrated mortgage market." These statements are significant in the light that only around 1 percent of homeowners buy a second home in any other European country.
Ray Boulger, technical director at mortgage adviser John Charcol also found fault with the Green paper and said, "The UK mortgage market is far and away the most competitive in Europe. As a result, Britons benefit from some of the cheapest mortgage rates in Europe, despite the higher base lending rate." He added that he had his own doubts whether the 'Euromortgage' was such a good step.
The consultation for discussion on the Green paper will continue up to November 30. Interested people may put across their views at mortgage-consultation@cec.eu.int
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