Chairman Peter Freeman said: “These measures are designed to open up the market to greater competition so that customers will get more choice and lower prices.”

The new measures require lenders to make their prices publicly available online so borrowers can shop for the best deal.

But the commission has not imposed price caps on repayment rates lenders can charge, as some observers anticipated.
Caps “could have reduced the availability of home credit to the most vulnerable customers, specifically those with no access to alternative sources of credit,” Mr Freeman said.

Home credit lenders will also be required to give rebates to customers who repay their loans early.

Provident Financial, the UK’s biggest home credit lender, vowed to “work constructively” with the Competition Commission to implement the new measures.

The commission expects most of the measures outlined to be implemented by the end of 2007.

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