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Euro concerns emerging

Fears are growing that the European Union consumer credit directive will damage the UK&#39s lucrative flexible mortgage market.

The State of the IFA Nation poll found 57 per cent of IFAs believe the directive poses a serious threat to the flexible mortgage market in the UK and 67 per cent of this group believe a European super-regulator will cover the entire market within five years.

Their concerns are backed by the Council of Mortgage lenders, which is lobbying the European parliament to change the current legislation, which would severely restrict the UK flexible loans market.

It would require lenders to provide advice for customers every time they take out credit agreements, restricting the client&#39s ability to borrow within agreed limits. It would cover all areas of consumer spending, not just homeloans.

The CML has warned that the plans could jeopardise UK reforms and bring regulatory chaos.

Independent mortgage expert John Malone says: “The CML really came out with some headlines highlighting the potential importance of the directive and this has clearly hit home with advisers. We have such a mature mortgage market in this country that this is obviously going to pose a problem. But flexible mortgages will be the market of the future, with far more advice opportunities opening up.”

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