Barclays poised to relax UAE mortgage rules

EXCLUSIVE: Bank set to join HSBC in giving boost to struggling real estate market.
Barclays poised to relax UAE mortgage rules
By Alex Delmar-Morgan
Wed 01 Apr 2009 05:24 PM

Hopes for the UAE housing market received a further boost on Wednesday after Barclays said it was set to lend more aggressively.

The news comes just 24 hours after HSBC announced a dramatic easing in lending policy, offering 75 percent financing on completed villas, 70 percent on completed apartments and 50 percent on off-plan units.

Previously its loan to value ratio was 60 percent and 50 percent on villas and apartments.

UK lender Barclays is believed to be weeks away from implementing its lending strategy in a sign that the liquidity problems that have prevented banks from borrowing at all but exorbitant levels on the money markets are improving.

“Barclays is closely evaluating the property market and will be more actively engaged in mortgage lending in near future. We have never pulled out of the market and in the recent past Barclays remained cautious in the best interest of consumers,” a spokesman for the bank told Arabian Business.

A regional liquidity crunch in the last six months has seen many banks slash their loan to value ratios, making it harder for investors to get a mortgage. Lack of mortgage availability has also contributed to falling house prices in the UAE.

Currently Barclays is lending 60 percent on villas and apartments in the UAE and is not financing off-plan properties.

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