The buoyant housing market in Britain is being mirrored across large parts of Europe, according to the European Mortgage Federation (EMF).
The EMF’s annual report says falling interest rates have fuelled growth, with lending growing ‘most spectacularly’ in the UK and Greece. Ireland, Luxembourg, Italy and Spain have also seen significant growth. But lending has grown more slowly in other European countries.
The EMF report attributes the buoyancy of the UK housing market to low interest rates, along with low unemployment and strong consumer confidence.
It points out competition among lenders has helped produce average mortgage costs for new borrowers in the UK that are among the lowest in Europe, despite higher UK base rates.
The report says the indicative interest rate on new loans in the UK at the end last year was 5.2%, the sixth lowest out of 16 European countries, at a time when the base rate in the UK was 4%, compared to 3.25% in Europe. The EMF foresees housing demand in the UK dampened by a combination of slowing economic growth and gently rising unemployment and interest rates.
Michael Coogan, director general of the CML, said: ‘The report demonstrates the competitiveness of the mortgage market, and low interest rates, are producing some of the best deals in Europe for UK borrowers. It is not surprising that home-ownership in the UK has increased in recent years to 69%.’