Home loans for Saudis help boost ownership

HOME SWEET HOME: Saudi Arabia needs 4.5 million new housing units within next five years to keep pace with population growth.

A finance company offering Saudi nationals the chance to own their own homes via an Islamic loans system has begun processing its first applications, its managing director said on Sunday.

Abdullatif Al-Shelash told reporters the Saudi Home Loans Company (SHLC) was the first of its kind to follow an Islamic housing finance system, and would serve the middle and poorer segments of the Saudi population.

"Our objective will be to promote home ownership by offering hassle-free home loans,” he said.

A huge majority of Saudi citizens live in rented accommodation with just 22% owning their houses. The kingdom will need some 4.5 million new housing units within the next five years to accommodate its growing population, Al-Shelash said.

The firm, which launched last week with 2 billion-riyal capital ($534 million), is a joint venture by Arab National Bank (ANB), which owns 40%, Installment Kingdom (40%), Dar Al-Arkan Real Estate Development (15%) and World Bank private sector arm the IFC (5%). It will operate through ANB branches for its first year.

Housing loan application forms can be accessed via Arab National Bank branches, or the SHLC headquarters in Riyadh.

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