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Tesco starts supermart Sweep into mortgage business

Mortgage lenders believe Asda may move into homeloans proposition after Tesco revealed last week that it will add mortgage products to its personal finance scheme.

Halifax press spokesman Paul Fincham says Asda and other leading supermarkets making an entry into mortgages should not be ruled out, saying: “There is a pretty low barrier to entry and it is a very attractive market.”

But Fincham warns there are around 155 lenders in the UK, which is the most competitive mortgage market in Europe.

He says Halifax would welcome the added competition from supermarkets but adds that they would certainly not find life easy in an already overpopulated mortgage market.

Sainsbury&#39s Bank pulled out of the mortgage sector to reassess its range in July, saying it will be coming back to the market with a “fresh and compelling” proposition in the next 12 months or so.

Fincham says: “Clearly, intermediaries are key in the UK market. The CML says 60 per cent of mortgages are sold through intermediaries. A brand driven proposition from supermarkets without intermediaries is interesting.”

Asda press officer Sian Harvey says: “We are aware of Tesco&#39s proposition but we have no current plans for mortgages.”

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