Lender "cartel" concerns raised

15-Dec-2005

Excitement surrounding the government's new plans to help more people onto the first rung of the housing ladder have been tempered by concerns over the lack of mortgage lenders currently taking part.

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Simon Tyler at Chase de Vere Mortgages told the Times that he would prefer there to be more mortgage lenders involved in the scheme so as to ensure aspiring first time buyers could find the best deal.

He explained: "I would like to see borrowers free to switch to better-priced products as soon as possible after buying a property, otherwise we will have a three-lender cartel dictating the level of interest."

Currently only Halifax, Nationwide and Yorkshire building society have signed up to the government's scheme, announced by chancellor Gordon Brown in his recent pre-Budget report.

However, if aspiring homeowners are to get the best deals when entering into shared ownership schemes, Mr Tyler believes there is a need for more flexibility and a greater number of mortgage firms on board to ensure competition in the market remains.

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Therefore, while there are many good points to the new plans announced by the chancellor, it appears that it will be some time before the actual benefits of the scheme become clear.

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