HBOS takeover 'could raise mortgage costs'
The cost of a mortgage in London or elsewhere could be set higher because of the takeover of HBOS by Lloyds TSB last week, it has been argued.
Although potentially in breach of competition rules concerning market share, the move has been allowed to pass by the government due to the exceptional nature of the current economic situation.
This bypassing of the competition issue could have detrimental consequences, senior economist at Centre for Economic and Business Research Charles Davis has said.
Noting that HBOS has been one of the "leading" UK mortgage providers in recent years, he commented: "You are removing one of the market leaders who have contributed to keeping prices down and providing cheap credit to consumers."
Such a situation could mean it is harder still to get a competitive and affordable mortgage to buy a house or flat in London.
Following the announcement of the takeover deal last month, chairman of HBOS Dennis Stevenson said the new bank would be one of the "strongest players" in the marketplace.
Published 1st October, 2008
© 2008 Estates IT Limited
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The cost of a mortgage in London or elsewhere could be set higher because of the takeover of HBOS by Lloyds TSB last week, it has been argued.