Mortgage experts have warned that a European Union proposal for member states to record the details of all mortgages in national registers would be expensive and unnecessary with significant costs passed on to consumers.
Buried in a report by the economic and monetary affairs committee rapporteur Antolin Sanchez Presedo, published last month, is a proposal for each member country to create a national register of mortgage loans to “ensure traceability and allow appropriate supervision”.
In some EU countries, such as Spain, mortgages are highly transferable so it is difficult to trace which lender has the mortgage and who is making the repayments but in the UK, lenders already keep detailed information on mortgages.
The Council of Mortgage Lenders says it would be very expensive and unnecessary to develop a central loan database in the UK.
Following the publication of the European Commission’s mortgage directive in March, two committees of the European Parliament – the Econ and consumer protection committees – must report on the proposals which then feed into a single set of proposals to be voted on by the European Parliament and then the council of the EU.
A CML spokeswoman says: “In the absence of a cross-border lending market, the proposed system of mortgage identifiers looks like a very expensive sledgehammer to crack a nut.”
Building Societies Association head of mortgage policy Paul Broadhead agrees and adds that the cost will fall on consumers. He says: “Ultimately, it is the consumer who will pay for this. They should instead require lenders to keep a record of what properties their mortgages are secured on and who is responsible for paying the loan. That means all the lenders in member states that have robust systems can simply maintain those and any countries that do not will incur the cost.”
London & Country head of communications David Hollingworth says: “This will prove expensive and will duplicate what is already in place in some member states such as the UK. It is an example of where lobbying in the EU is really important.”