Home owners and estate agents alike have been left shocked and angry this week by new EU plans to push up mortgage prices in Britain. This new directive will cost British families thousands of pounds by making it far more difficult to switch between mortgage lenders in order to find newer, better deals.
The EU Mortgage Credit Directive, which will come into force across the European Union in March 2016, will introduce strict new affordability tests on mortgages, exempting only existing borrowers who stay with the same lenders.
In other words, if you and your family want to change your mortgage provider to take advantage of new deals, you are now far more likely to be rejected by the new lender due to the stricter criteria. Over the course of paying off your mortgage, the amount of savings you will miss out on will cost you thousands.
Not only this, but the directive will also penalise Britons who want to buy holiday homes abroad. Currently, some lenders offer mortgages to buyers for a property in a different country. For example, a British family could arrange a mortgage with a building society or bank based in France for a French holiday home.
However, the new directive states that in certain cases lenders will only offer to switch mortgage payments to one currency or another, so a British family paying their mortgage on a holiday home in Europe would have to pay in either pounds or euros wherever their income is derived from.
Whilst this may seem like a good idea in principle, in practice with currency exchange rates so unstable, it would be far too risky for lenders to offer mortgages for overseas properties. Rather than be subjected to this diktat, Nationwide has already declared it will no longer offer cross-border mortgages.
With many more providers destined to follow suit, it is going to become increasingly difficult for Britons to get mortgages to buy properties in the rest of the EU. With so few lenders continuing to offer cross-border mortgages, those lenders who do will be able to dramatically increase their mortgage rates, making it far too expensive.
On St George’s Day of all days, we should remember the phrase “an Englishman’s home is his castle”.
Getting on the property ladder and feeling a sense of pride in living in a house you own is part of what puts the great into Great Britain. This is reflected in high rates of home-ownership seen across the UK, whilst renting is very much the norm in many continental EU Member States, such as Germany.
This demonstrates both the absurdity of the EU’s ‘one-size-fits-all’ approach to federal policy making and how little the bureaucrats of Brussels take into account the effect of their laws on the Great British Public.
Unaware or unperturbed by how important property ownership is in Britain, this new EU directive cooked up by the Eurocrats will be hugely damaging to hard-working home-owning British families.
The European Union will continue to impose regulations like this which damage the way of life of Britons as long as we retain our membership of this failed political project.
If we want to ensure British laws are made in the best interests of the Great British Public and not the 450 million EU citizens who do not live in this country, we must Get Britain Out of the EU.
This article was cross-posted on The Commentator, here.