Monthly Archives: December 2012

News: Further restrictions on UAE mortgages – edited 21/01/13

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EDIT 21st January 2013

According to an article published by Zawya issued today taken from Reuters:

“The United Arab Emirates central bank will not impose limits on mortgage lending without consulting commercial banks, and any new rules are not imminent, central bank governor Sultan Nasser al-Suweidi was quoted by a local newspaper as saying….
….But Suweidi was quoted as saying by Al Ittihad newspaper on Monday that there had been a “misunderstanding” in the media and that no central bank ruling had been issued, only a warning to banks to be prepared for rule changes in the future.”

This is rather strange as I have a copy of the notice that was issued to all banks and after it has set out the revised loan to value limits,  it clearly states that “all  banks and finance companies are required to comply with this notice”.

It seems that some back tracking is taking place…

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Original post 31/12/12

Yesterday the UAE Central Bank issued a circular, to take immediate effect, limiting mortgage borrowing to no more than 50% of the value of the property for expats. This was largely unexpected and lenders are having to change their offerings immediately as many were previously lending 70-80% of a property’s value.

It appears that pre-approvals for higher loan to value mortgages are also being withdrawn and that will leave many people unable to proceed with a purchase. It will also severely restrict the remortgage market.

It appears that the Central Bank intended to stop the aggressive lending that fueled the boom years in the UAE property market and led to significant bad debts across the banking sector, something many are still saddled with.

The circular states that mortgages for expatriates are being limited to 50%
for their first property, and those to UAE nationals at 70% of the property’s value. For subsequent units, expats can borrow up to 40% with UAE Nationals being restricted to 60%.

There have been several claims recently that the UAE property market was showing an upturn, but this news will surely halt that as fewer people will be able to afford such large deposits and for the same reason will reduce the secondary market.

It’ll certainly be interesting to see the reactions of interested parties over the next few weeks. Happy New Year!

keren@holbornassets.com

dubai property

Season’s Greetings

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As the end of 2013 rapidly approaches, we can look back at yet another year of highs and lows, both in terms of world events and finances. We have seen continued volatility in equity markets, but the major global stock market indices appear to be ending the year significantly higher than a year ago. We are far from out of the woods, financially speaking, but there is still potential for growth for the smart investor.

I am now taking a break until January and wish everyone a very Happy Christmas and a healthy and prosperous New Year.

Keren

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News: British national with a foreign spouse? Good news!

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Although there have been whispers about this for some time, it now appears that the UK Government really is planning to relax the inheritance tax rules relating to British nationals with a foreign spouse.

The current situation is that under UK inheritance tax (IHT) rules transfers of assets between spouses are usually free from tax at all times and also at death, but only if both parties are UK domiciled, a legal concept separate to residency. In most cases a person needs to have been born in the UK, or for their father to have been, to be UK domiciled.

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Every little helps…

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This is a time of year when many of us incur a great deal of expense. Not only do we spend money on gifts and food at Christmas, many expats also travel to their home country for the holidays.

The point of this quick post is just to remind you of a few ways in which you can save some money, not only during this month, but throughout the year.

The Entertainer Books. Many people will be familiar with these books with contain vouchers, usually on a ‘buy one get one free’ basis for cafes, restaurants and activities. You only need to use it a few times to recoup the cover price. If you haven’t bought your books for 2013 there is an ongoing offer to buy online and receive a discount of 10%.  http://www.theentertainerme.com/

Loyalty and discount cards. There are quite a number of these and I believe the better ones include Airmiles, Amber, Time Out and hotel cards for places you frequent regularly. Some give you discounts on purchases, on meals, of room stays or you can accrue point that you can redeem for all manner of items. You may end up carrying around a few extra bits of plastic, but at the end of the year you might have earned enough points for a night away, to buy something for the home or have saved hundreds of Dirhams on meals and drinks.

Vouchers. A number of publications have voucher offers that you redeem for a specific period. Whilst most won’t be of interest to you, it can be worth checking the various sites in case something comes up that you do want. There are a number of group buying sites operating in the UAE. The downside can be that if an offer is very popular you can be limited regarding the dates you can use them and it is suspected that many never get used and expire.

Currency transfers.  I would venture to suggest that most expats in the UAE transfer money between currencies at some point. Many people make an online transfer from one bank account to another, but this is rarely the most cost effective way. Many banks charge a set fee and even if they don’t they tend to offer uncompetitive exchange rates, which are rarely disclosed on their websites.

You can get better value for money by using a currency exchange house. These are different to the companies with high street outlets and offer particularly competitive rates for larger transfers, although the rates are also good for smaller payments and regular transfers. The system I recommend is quick, easy, secure and regulated. See this earlier post on this site and contact me for specific details without obligation. Save money on currency transfers

Bank account and credit cards  In the past it has been almost impossible to work out which is the best account for you in the UAE, but now you can access information via the Souq al Mal website. This offers information from over 20 banks so you can see if you are getting the best value. The site provides detail of interest rates, fees and also loyalty and benefit schemes.

Contents cover  Not a way to save as such, but if you have a fire, flood, or break something valuable then this could represent excellent value for money and is certainly cheaper than paying to replace everything yourself. Full details on this recent post Contents insurance

Be smart with your money and take advantages of easy and painless ways to spend a little less.

keren@holbornassets.com