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&#39A&L gives too little notice of rate closures&#39

European mortgage markets are showing a huge disparity, with Scandinavian countries and the UK seeing significant rises in gross lending while Germany is in decline.

Figures from the European Mortgage Federation show Denmark saw a 103 per cent rise in gross lending in the first quarter compared with the same period in 2002.

Other countries that saw big increases include Finland (42 per cent), Sweden (22 per cent) and the UK (17 per cent). But gross lending in Germany fell by 23 per cent.

The same period also saw big differences in the level of house price rises. While prices in the UK and Spain soared by 19 and 17 per cent respectively, Denmark saw an increase of 3 per cent while the rise was 1 per cent in Norway and the Netherlands.

Housing expert John Wriglesworth says: “The disparity shows that, notwithstanding the fact that these countries have a single monetary policy, economic cycles are different due to local conditions. The common market does not unify anything.”

CML spokesman Bernard Clarke says: “By the time we join the euro, it may be that European housing markets operate in a more similar fashion.”

Mortgage brokers have lambasted Alliance & Leicester for giving them unacceptably short notice periods when it closes its fixed-rate deals.

Charcol says the problem dates back to December when A&L sent out an email one evening saying it would withdraw two fixed rates at 5pm the next day.

Charcol says the move caused chaos the next day by clogging phone lines and the deal actually closed at 10.30am.

A&L then announced it would change the way it alerts brokers over fixed-rate closures. Brokers now have until 5pm on the day the email goes out to make online applications. Postal applications with that day&#39s postmark are also accepted.

But Charcol says the earliest A&L has sent out an email is still after 5pm, so brokers have almost no chance of getting in applications on time.

Charcol senior technical manager Ray Boulger says: “Alliance & Leicester do provide reasonable rates but they withdraw them without reasonable notice. Their actions are totally unacceptable behaviour for a FTSE 100 bank.”

A&L director of intermediaries and agencies Andrew Robinson says: “I acknowledge that there is room for improvement in this process. However, in this volatile market, we have to manage within our available fixed-rate tranches. I am considering an enhancement to tranche management to bring benefit to brokers and to the bank.”


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