UAE mortgage rule strikes those it aims to protect - The National

UAE mortgage rule strikes those it aims to protect - The National
The New Year will bring little cheer to house hunters who, as they ushered in 2013, will have learnt they may need to double their deposits as a result of a new mortgage lending cap.

Regulation can move like a pendulum - overcorrecting weaknesses in a market and creating further structural weakness in the process. The enforced cap on loan to value ratios threatens to do just this, analysts observe.

It emerged this week that expatriates will only be able to borrow up to 60 per cent for their first home purchase and 50 per cent for subsequent purchases. At the same time financing for Emiratis was limited to 70 per cent for the first home and 60 per cent for further properties.