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  • 16/12/2002
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With entry into the euro likely, how different are the UK and European housing markets?

Compared to the main eurozone countries, the UK not only has a lower average mortgage rate, it has also consolidated its position as Europe’s most active and well-served mortgage market.

In terms of products, over two-thirds of residential mortgages across Continental Europe are fixed rate with the maj- ority straightforward repayment mortgages. Interest-only mortgages may have declined in popularity in the UK, but growing competition and diversity in the European mortgage market has led to a rise in this product whereas tracker mortgages and other products such as ‘capped rate’ or ‘cap and collar’ mortgages are still unheard of in some European countries, such as Germany. In most of Europe, lenders offer long-term fixed-rate mortgages (usually 10 to 25 years). However, such products do not exist in Italy and fixed rates for the term are rare in the UK.

Europeans differ in their attitude to mortgages. There is a widely-held perception the UK has the highest level of owner-occupancy in Europe. However, this is not the case. Spain (78%) and Italy (78%) have the highest rates of owner-occupancy with the UK at 69%. France (54%) and Germany (41%) have some of the lowest owner-occupancy rates in Europe.

Martin Ellis

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