UK lending report 'not relevant'

The Irish Mortgage Council has said that key recommendations in a UK mortgage lending report are not relevant in the Irish market.

The report said UK lenders should be required to offer cheap deals, which they use to attract new customers, to their existing customers.

The recommendations, contained in a report prepared for the Treasury by Prof David Miles, are part of a wider review designed to encourage more borrowers to take up long-term fixed-rate mortgages that are common in continental Europe and the US. This is seen as a method of making the economy less vulnerable to swings in short-term interest rates.

In a statement yesterday, the mortgage council said that the difference in the rate of interest offered to new and existing customers by Irish financial institutions is far less than in the UK.

"Lenders in the Irish market compete vigorously on the basis of standard variable rates, which are at extremely competitive levels" it said.

Last week, the EBS Building Society said it would stop the practice of offering discounts to new customers and would make the same rate available to all customers.

Referring to the proposed move towards long-term fixed-rate mortgages, the council said that such rates are available in the Irish market but customers tend to favour shorter-term offers.

"This reflects the confidence which consumers have in the euro and in the medium- to long-term stability of ECB rates."