Abbey National France is to offer UK buyers a range of euro-denominated mortgage deals, while Halifax has released data saying that the UK has some of the most competitive deals in Europe.
The French division of Abbey announced that UK buyers of European property would benefit from the European Central Bank’s low base rates, which are lower than in the UK. The company saw a 66% increase last year in people buying a home in France, citing the good value French house prices represent, good exchange rates and improved travel links.
David Wells, Abbey National France’s managing director, said: “With the official launch of the euro on 1 January, France has been gearing up for its new currency for some time. Now our existing and new customers can benefit from a competitive range of euro-based mortgages which, based on the European Central Bank base rate, will offer them great value for money.”
Halifax made the point that rates in the UK have fallen more than in any other EU country, bar Greece, in the last year. It said the choice of mortgages is far greater in the UK than in Europe, with greater innovation in product development.
Shane O’Riordain, Halifax’s director of communications, said: “This research underlines the fact that the UK has one of the most competitive rates in the EU, even though we will not be in the Eurozone. UK consumers also benefit from a wider range of products and product providers than anywhere else in the EU.”
Figures from the European Mortgage Federation show indicative mortgage rates for France of 5.8% in the second quarter of 2001, while the UK rate for the same period stood at 6.1%.
Ron Howell, sales director of British Mortgages Abroad, doubted whether euro-denominated mortgages would take off. He said: “If you are paid in euros, that’s fine. But most people buying property abroad will tend to buy it in the currency they are paid in.
“I believe that if someone is paid in sterling, they are better off having a mortgage denominated in sterling. If you wanted to pay a mortgage in euros, while being paid in sterling, then you would be charged a fee for changing the money across.”