British bank stops issuing mortgages for UAE flats

Mortgages for UAE apartments halted and a 50 per cent down payment for villas is required.

ABU DHABI // In a sign of worsening lending conditions, a British bank announced today it had stopped granting mortgages for UAE apartments and is now requiring a 50 per cent down payment for villas, a spokesman said. "Due to exceptional global market conditions, Lloyds TSB Middle East has altered some aspects of its mortgage product offering," the spokesman said, adding that the bank "is not currently lending to customers who wish to purchase apartments".

Lloyds will lend to customers buying a villa, but at a new rate of 50 per cent. The bank's lending standards are now among the most strict in the UAE and along with a general wariness among property buyers, it will further contribute to the slowing sale of apartments in the market. Other banks across the country have raised their home finance offerings to 20 and 25 per cent in recent weeks as the world financial markets entered turmoil and global banks restricted lending to each other. During the early part of the summer, buyers could easily get 10 and 15 per cent deals.

Lloyd's decision was first reported by Arabian Business today. [e-mail]