What you should do in property market today - Emirates 24/7

What you should do in property market today - Emirates 24/7

With property values depressed and some great bargain deals available in today’s market, a number of tenants are asking themselves the same question: “Should I continue to rent or is it time to buy?” The most important factor to be considered before purchasing a house is the availability of finance, but with new mortgage rates being slashed, cheaper finance would seem to be readily available for qualifying customers.

The devil, say experts, is in the detail. “Common wisdom holds that in the long term, it is always better to buy a home than to rent. However, it’s not really what makes more sense as for anybody, an investment such as property is beneficial as long as it’s affordable - the only issue is that banks are not really lending the needed amount to enable people to purchase property,” Laura Adams, Manager - Residential Sales and Leasing Manager at Better Homes, told Emirates24|7.

While a a number of banks have reduced their mortgage rates and some are offering as low as 4.99 on new loans, most are asking for a very high loan-to-value ratio, i.e., a 30 to 50 per cent down payment of the property value. According to Lloyds TSB, it offers a rate of 5.49 per cent for villas and 5.99 per cent for apartments, with an LTV ratio of 50 per cent. “We have recently extended [our] fixed rate mortgage offer to 7 years. The current mortgage rate is from 5.99 per cent, taking into account the LTV and term,” said a spokesperson at Barclays.