Murdoch to bring online mortgages to Britain

The home loans industry is set for a massive shake-up after Rupert Murdoch unveiled plans to bring E-Loan, America's leading online mortage broker, to Britain.

Mr Murdoch's News Corporation and the Japanese investment business, Softbank, are to invest $22.5m through a new joint venture to set up a UK arm of E-Loan. The funding is part of a $150m-plus internet investment programme announced yesterday.

E-Loan is a California-based service set up by two former mortgage lenders two years ago. It has just been floated in New York in one of this year's most successful market debuts.

It claims to offer cheaper mortgages because of lower overheads. It also offers easier access to more than 70 lenders and thousands of different mortgages. British customers may eventually be able to make applications online and directly compare rival offerings using the E-Loan service.

The investment is the first to be made by eVentures, a venture capital business jointly owned by News Corp's media investment offshoot, epartners, and Softbank. E-Loan in the US and eVentures will have an equal share in E-Loan's British offshoot.

Mr Murdoch indicated that eVentures would invest in small internet start-ups in the US to help them expand into Britain, Australia, New Zealand and India.

Softbank yesterday announced that it had set up a similar venture with France's fast-growing Vivendi media group to focus on bringing US internet businesses to Europe. Vivendi owns 17% of British Sky Broadcasting, Mr Murdoch's satellite television business.

Softbank and epartners have invested an initial $50m in eVentures. Epartners is also investing $100m in the Softbank Capital Partners LP Fund.

Mr Murdoch admitted that the majority of internet companies were based in the US. "There is nothing we want more than for British inventors and entrepreneurs to come to eVentures. We have absolutely an open door."

He said the venture with Softbank would like to be involved with the birth of British and Australian internet companies, but added that neither country had an entrepreneurial climate.

"Both countries have been slow," he said. "If you look at tax regimes and capital gains tax, it is more attractive for venture capital in the US."

He did not expect eVentures to be floated as a separate listed company, but would profit by having bought stakes in small companies which were later floated.

"The internet is going to be very important for News Corporation," he said. "As a protective measure, you have to be prepared to deliver on the internet as well as by traditional methods."

Mr Murdoch rejected suggestions that Softbank's links with both Vivendi and News Corp might lead to a merger between BSkyB and Canal Plus, in which Vivendi has a stake. Referring to past merger talks, he said: "We learnt that BSkyB was a great British asset and should not become a football for French politicians."

However, he did not rule out the two companies working together on ventures such as film production. "I do not envisage relinquishing control of BSkyB," he added.

BSkyB chief executive Mark Booth left to head epartners after the failure of talks between BSkyB and Canal Plus.