Business & Money | Wednesday 24 February, 2016 4:37 pm |

The number of internet searches for home loans in Saudi Arabia is expected to surge, after local news reports in the kingdom suggest the Saudi Arabian Monetary Agency is considering raising the loan-to-value (LTV) ratio on mortgages to 85 per cent from 70 per cent.

 

The kingdom’s leading financial comparison website, amwalak.com, the sister site of UAE-based financial comparison group compareit4me.com, is predicting a flow in mortgage loan applications after local reports hint at an increase in LTV.

 

For ambitious homeowners unable to afford a 30 per cent down payment, this could be the move they’ve been waiting for says Jon Richards, CEO of compareit4me Group. “A higher LTV not only creates greater opportunity for buyers to fulfil their home ownership dreams by making it easier to raise a deposit, but a potential rise in loan-to-value ratio paired with the new 2.5 per cent tax the Saudi government has imposed on unused urban land, will hopefully boost home ownership in the kingdom,” says the CEO.

 

Just last month a new Saudi-based mortgage lender, Bidaya Home Finance, commenced operations in an attempt to boost home ownership in the country. This, says Richards, is a welcome move and one that amwalak.com is well positioned to support. 

 

“In the Internet age, consumers are going to go online for real estate financing information and amwalak.com will make searching for home loans quicker and more convenient,” says Richards, adding: “A government-backed initiative such as Bidaya supported by a potential reduction in home loan deposit requirements comes at an opportune time. As Saudi Arabia shifts away from oil dependence into other sectors amid a fall in oil price, the real estate sector is a logical – and essential – industry to focus on in building a diversified economy.”