A clampdown by Dubai banks on the availability of personal loans is making it difficult for potential renters to secure finance, according to a local real estate company.
Better Homes claimed on Wednesday that it can now take up to nine attempts at different banks to secure a personal loan to pay the one or two rent cheques landlords still prefer.
However, the stricter loans policy comes at a time when more properties are coming on to the rental market as a result of the economic downturn, and a drop off in property buyers.
Banks have not hiked salary levels for loans but occupation and length of time in Dubai are now strictly assessed, with lawyers and police officers often being randomly discriminated against, according to Gavin Frith, manager of Better Plus, a subsidiary of Better Homes.
The situation with securing loans has become so difficult that the company launched a new service six weeks ago, which acts as a middle man between its customers and banks, in a bid to streamline the lending process, Frith added.
“Some banks will lend to some people and other banks will lend to others, it depends on a number of things such as type of employment, but imagine going to nine different banks to get a loan,” Frith said
“What we now do is we will find the bank that will lend to you,” he added.
The company said about 50 people per week are calling the company enquiring about the Rental Assist scheme that will pay up to 12 months rent upfront that can be repaid over a year, or up to a four year period.
The scheme is run by Better Homes’ sister company Independent Finance that charges a one-off service fee of two percent of the total loan.
Arabian Business reported last week that landlords were starting to move on the traditional one, two, three and four cheque policy - with many becoming more willing to take on 12 cheque agreements.
However, the total amount of rent paid usually increases in line with the regularity of cheques, which means fewer cheques is still a cheaper option for tenants, Frith pointed out.
The loan difficulty has come to light in the wake of news that rents in some of the most prestigious part of Dubai have fallen by 33 percent in the last two months, according to an Arabian Business investigation.
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