For UAE residents, rents are one of the biggest costs that they bear every month. For some of the residents, it accounts for the highest expense of their monthly or yearly budgets.
Rents have been consistently on the rise across the UAEß over the past three years due to the massive influx of foreign workers into the country as the economy expanded at a strong pace.
In the last quarter of 2023, according to real estate consultancy CBRE, average apartment rents increased 2.0 per cent year-on-year in Abu Dhabi, while villa rents rose 0.8 per cent. Similarly, rents in Dubai and the Northern Emirates also maintained their upward trend in 2023.
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In Dubai alone, the rental market analysis revealed 205,346 new contracts and 293,624 renewals. Looking ahead, rents are projected to continue the upward trend in 2024, although at a bit slower pace.
To cope with the rising rent challenge, a number of local banks are offering a ‘rent in advance’ facility to ease the burden on their customers.
Here are some of the banks that offer the facility:
Dubai Islamic Bank
The largest Shariah-compliant lender in the UAE, provides this facility to residents who are moving to a new apartment or leasing a home through Al Islamic Finance.
HSBC bank
It also provides its customers the facility to pay rent in advance through a ‘Rent Loan’ with an annual percentage rate starting from 7.24 per cent. This rate is available to Premier customers working for an HSBC-listed company and who transfer their salaries to HSBC. The rate is based on the reducing rate which is fixed throughout the loan tenor, and is inclusive of a 1 per cent arrangement fee amortised over the maximum loan tenor of 48 months. Interest is calculated on the basis of a 365-day calendar year and accrues daily. HSBC applies the interest rate to the loan balance as it reduces each month.
Ajman Bank
It offers rent through its personal finance scheme ‘Service Ijarah’. Under this Shariah-compliant scheme, the Islamic bank will purchase the service as requested by the customer and allow the customer, the right to use it and the benefits of the service for a predetermined period of time and in return the customer will pay a pre-determined agreed rent.
First Abu Dhabi Bank
It allows tenants to manage their rent payments with the bank’s credit card. The bank is offering interest-free easy payment on rent and property fees.
Al Hilal Bank
It helps tenants in difficult financial times to pay the rent of their house through the ‘Rent Finance’ scheme. The lenders offer payment tenure of up to one year with competitive rates. The other requirements are a Dh5,000 minimum salary, a valid passport and visa, a six-month bank statement and other documents if required.