Consumers have little appetite for a European Union market in mortgages as the benefits would be questionable, consumer groups and banks said today.
"Consumers are a bit sceptical about market integration in the area of mortgage credit," said Dominique Forest of pan-European consumer lobby BEUC.
Few of the EU's 450 million citizens buy a mortgage outside their own country. "They tend to get mortgage credit at local level, at the branch next door," Forest told a hearing organised by the European Commission.
The Commission is studying whether new EU rules are needed to spur integration of the bloc's 25 national mortgage markets, and is expected to reveal its findings in 2006. "It's too early to draw any firm conclusions," EU Internal Market Commissioner Charlie McCreevy told the hearing.
Mr McCreevy said the public consultation so far had shown the Commission had a role to ensure that domestic and foreign lenders were treated in the same way by member states - such as with respect to access to land registries and customers' credit history. "Any initiative we may propose could take many forms, not necessarily legislative," Mr McCreevy said.
Annik Lambert, Secretary General of the European Mortgage Federation, said studies by the European Central Bank and others showed national mortgage markets in the EU were efficient.
"The obstacles that should be addressed first are the obstacles that prevent lenders going abroad," Ms Lambert said.
Consumers were not interested in shopping around the EU for a mortgage as they were not familiar with lenders in other countries, she said.
The Commission asked consultancy London Economics to study the mortgage market and possible benefits of integration.
Forest, Lambert and others said the study was an inadequate base for the Commission to decide on possible regulation, and a proper cost and benefit analysis should be made before proposing legislation.