Supermarkets may axe plans to sell mortgages
March 21, 2009
As most people are aware the supermarket giants of today sell a lot more than just groceries and household goods, with many selling a range of financial products such as insurance, loans, and credit cards, and some even offering banking facilities.
Over the past year some supermarkets have toyed with the idea of moving into the mortgage market, with some making plans to start selling mortgages in what has become an increasingly difficult and restricted sector.
However, according to a recent report the supermarkets that were planning their move into the mortgage market may have to shelve their plans, and this is because they are having problems getting the finances that they need to fund their mortgage lending activity.
Last year saw a couple of major supermarkets, Asda and Tesco, announce plans to break into the mortgage sector. Asda had already entered into talks with regards to finance providers, and was hoping to launch its range of mortgages before the start of this year.
Asda has already now confirmed that it no longer has any firm plans to launch its mortgage range in the current climate, and Tesco has also said that it has no imminent plans to launch its mortgage range, although an official for the supermarket giant did state that Tesco still wanted to branch out into current accounts and mortgages amongst other financial areas.
One industry official said that supermarkets and new brands were being hindered when it came to entering into this market due to lack of available financial provision. He said: ‘I would be interested to see where Tesco is going to find its mortgage funding. I will be very surprised if it does launch the offer.’
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