'Part of the reason for this lower loan-to-value ratio is that we think this protects both the customer and bank in a correction of house prices. And we are on the record as forecasting a softening of prices in the near future. It is prudent to have this level of protection.'

Mortgage rates at Standard Chartered are around eight per cent per annum which is comparable to other rates available in the market, although rates do fluctuate and are linked to the floating DIBOR rate plus 2.75 per cent. They are not fixed.

Fees

Buyers also have to bear in mind the fees now required to register a mortgage with the Dubai Land Department and a Dhs3,500 fee for an independent valuation. There is also a two per cent charge in the event of early repayment and a one per cent loan processing charge.

But possibly the main reason why buyers choose an international bank like Standard Chartered, HSBC, Lloyds TSB or Barclays over the local banks or specialist home loan companies is that a mortgage is a long-term commitment and there is peace of mind in knowing that an institution is regulated to the highest global standards and has a balance sheet that can cope with repossessions and a market downturn.

Coming correction

'We have not had one re-possession in Dubai to date,' says Mr. Belman. 'But this just has to happen in any market, and it will also be a test of the strength of the new real estate law when it does.

'The new legislation was the critical inflection point for us in going ahead with our mortgage products in the UAE. In due course we will bring our Mortgage 1 product here from Asia with an integrated current account and we are also examining Islamic mortgage options.

'It is an exciting time for home buyers both in Dubai and Abu Dhabi, where the market is at an earlier stage. And we think with our global experience we can offer a better standard of service, and this is how we intend to compete with our rivals.'

In Asia Standard Chartered Bank is the number one mortgage provider, and the fact that it is now prepared to lend in the UAE clearly says something about the growing maturity of the market and the bank's confidence in the future. But this will probably not be the last entrant to this booming market.