Tesco mortgage plans put on hold

Date:

Monday 4th October 2010

Tesco Bank's plans to launch a mortgage range by the end of 2010 appear to have been delayed until at least next year, due to difficulties securing regulatory clearance.

Tesco first revealed its ambitions to enter the mortgage market in 2008. The supermarket giant had hoped to launch mortgage and savings products by the end of 2010, with current accounts to follow in 2011.

But with the supermarket's banking arm struggling to gain approval from the Financial Services Authority (FSA), the company may now have to wait until next year before it can start to offer home loans. The regulator has tightened up its rules following the credit crunch.

A spokesperson for Tesco said: "The FSA is just being careful. It is a new process and it is very difficult."

Tesco is only one of a number of companies seeking to enter the mortgage sector.

The government is keen to see more firms enter the banking services market, in order to shake up the UK financial services sector and increase the availability of mortgages.

Tesco has long been involved with the property industry. The company has been constructing new and affordable homes nationwide since 1997.