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Brussels, 13 September 2005

Commission publishes study on the costs and benefits of further integration of the EU mortgage credit market

The Commission has published a study on the costs and benefits of further integration of the EU mortgage credit market, carried out on its behalf by UK based economic consultancy London Economics[1]. The study follows the recent publication of the Commission’s Green Paper ‘Mortgage Credit in the EU’. The Green Paper provided the Commission’s initial views on the recommendations of the Mortgage Credit Forum Group report and other matters relating to the EU mortgage credit market, launching a wide-ranging consultation, which will remain open until 30th November 2005. The study is part of the overall review and consultation process and the Commission will review the study carefully, as part of its assessment of the business case for Commission intervention in the EU mortgage credit market.

Internal Market and Services Commissioner, Charlie McCreevy said “This is an important element in the consultation and review process which we launched in July. It is part of our ongoing assessment of whether Commission action can increase competitivity and help bring about improvements in choice and value for the buyer. I want to underline that I am in listening mode and to encourage people to let their views be known to us.”

The study estimates the current (2005) value to the EU economy of such increased integration over the next ten years at Eur 94.6bn, which amounts to 0.89% of current EU GDP. By 2015, the study estimates that integration of the EU mortgage credit market would raise EU GDP by 0.7% and private consumption by 0.5%. The study finds also that there is demonstrable appetite, amongst consumers, in given circumstances, to engage in mortgage credit transactions with foreign lenders, with more than 50% indicating that the foreign identity of lenders would not discourage them from taking advantage of attractive mortgage credit offers. Lenders too showed signs of interest in increasing activity across borders, with over 70% showing an interest in opening branches or subsidiaries in other Member States and at least 60% showing an interest in other forms of cross-border activity, such as mergers and acquisitions with foreign lenders.

This interest in different kinds of cross-border activity is reflected the Commission’s view that integration in the EU mortgage credit market can occur in many ways such as lenders establishing branches/subsidiaries or using intermediaries in other Member States, free provision of services (where the consumer is in one Member State and the lender in another), greater cross-border activity in the funding of mortgage credit and mergers/acquisitions across borders.

The Commission remains open on the relative merits of these mechanisms and the contribution that they can make to the creation of a European market for mortgage credit. The study analyses the costs and benefits of integration through all mechanisms, reflecting this wide-ranging approach, as does the Commission Green Paper.

The conclusion of the consultation on the Green paper will be marked by a public Hearing on Mortgage Credit, to be held on 7 December 2005.

Thereafter, having fully considered the results of this in-depth consultation, the Commission will decide on if and how intervention is merited in the EU mortgage credit market, presenting its conclusions in a White Paper in mid-2006.

Views on the study can be sent by email to by 30th November 2005.

[1] London Economics were awarded the contract after an open call for tender. The study and all other documents to which reference is made in this press release can be found at

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