Mortgage association 'frustrated' with pre-budget report

Thursday, December 10th 2009

Alastair Darling's pre-budget report announced on December 9th is "disappointing" for the mortgage market, according to the director of the Association of Mortgage Intermediaries (AMI).

Robert Sinclair said the organisation is particularly frustrated that the chancellor failed to address the lack of competition in the mortgage market.

Prior to the report’s release, AMI published a submission calling for the government to ease up capital and regulatory requirements for non-banking institutions and building societies.

Some 80 per cent of the current account market is controlled by four banking groups and 90 per cent of mortgages are written by six groups, which leads to a lack of competition, the association noted.

Mr Sinclair said this is "the greatest problem we face in the mortgage market" and claimed the government must accelerate its commitment to work on issues such as mortgage-backed securities through the Council for Financial Stability.

In his pre-budget report, the chancellor indicated the government "is taking steps to promote competition in financial services and to ensure that consumers are empowered to make informed choices".

But Mr Sinclair claimed that the association remains frustrated that Mr Darling has failed to address the problem more urgently.