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European Parliament Discussing Mortgage Credit

The proposal for a directive on mortgage credit relating to residential property is under discussion at the European Parliament. The proposal was published by the European Commission in March of last year, but there have been different views about what should be included in the final version of the directive. On 25 January the Internal Market and Consumer Protection Committee (IMCO) voted on an opinion prepared by Kurt Lechner MEP. This makes some changes to the Commission proposal particularly concerning consumer information requirements such as advertising and pre-contractual information. CEPI follows with interest the discussions concerning the proposals.

The Economic and Monetary Committee (ECON) still has to vote on the proposals and is considering a number of amendments to the report prepared by rapporteur Antolin Sánchez Presedo MEP. It had been due to vote on this issue before the end of this month, but the vote has been delayed to allow greater time to reach a consensus.

There are a number of issues in the original proposal and the various amendments which are of particular interest to property professionals. An adequate supply of mortgage finance is vital for a healthy property market and restrictions on its availability would have an impact on the residential property market and the volume of transactions.

The proposals also deal with the authorisation and supervision of credit intermediaries, which may impact on some of the services offered by property professionals. It is important to be clear about the definition of the professionals to be included and the requirements to be imposed. The Parliament has also suggested that property valuation should be brought within the scope of the proposals, and this needs to be clarified.

The residential property market is an important part of the European economy. We encourage the Parliament to take account of the concerns of property professionals in reaching a consensus.