Some news and views before we take a Christmas break…
The EU Mortgage Directive has been passed by the European Parliament to cover residential mortgages across member states. In essence, it should ensure that all home buyers across Europe are informed about the real costs of a mortgage; as members know, it’s not always easy to identify all the costs what with various introductory rates, assorted fees etc.
Antolin Sanchez Presedo, an MEP, is quoted widely, ‘For most families, a mortgage is the biggest and longest financial commitment they make. So we need these rules to drive progress towards an EU-wide mortgage market that is stable, integrated, and above all sustainable, with a high level of consumer protection, good information and balanced relations between lenders and borrowers.’ Note: this is not BTL-related. More to come for those of you who are taking out mortgages for second homes etc.
According to PropertyFinder.ae, property prices in Dubai are still rising and at a faster rate than those in Abu Dhabi. ‘Whilst Abu Dhabi’s property prices have increased over the course of this year, Dubai’s residential prices have risen more significantly, widening the gap in property values between the two emirates.’
The site seems to suggest that Dubai’s price rises have been triggered by solid fundamentals such as trade and tourism. If so, we note that only key areas and sectors, such as Jumeirah Village Circle and Palm Jumeirah, are experiencing such rises and, from what we can see, there is still substantial supply in the system. Progress, if you do, with caution. We have a short report coming in the New Year as we have two or three HNW & S investors visiting in the first week of January.
Ray Boulger at broker John Charcol offers his thoughts on the EU Mortgage Directive. ‘It addresses a non-existent problem as far as the UK is concerned. The concept is based on the EU principle of harmonising everything – in this case of mortgage regulation – in all 28 member states. However, one size doesn’t fit all in the mortgage market any more than it does with the Euro! For example, well over 50 per cent of mortgages in the UK are arranged by a broker, whereas in some member states brokers are almost non-existent.’
‘The rationale of the Directive is that competition will increase because consumers will be able to obtain a mortgage from any lender in the EU, but in practice other barriers will prevent this from happening. In any case lenders who wish to lend in other EU states can already do so quite satisfactorily by setting up a subsidiary or branch in that country. One of the reasons few lenders offer mortgages on properties across borders is that the legal processes and credit reference agency information are different in every single member state and unless and until these differences are harmonised cross border lending is generally not viable.’ Let us know if you’d like to know
more about this Directive.
All for now, see you soon – meantime, have a happy and peaceful Christmas.