First-time home owners continue to have access to financing, said Bank Negara Malaysia (BNM), in response to calls for lending guidelines to be reviewed to ease home ownership for first-time homebuyers, as reported in TheEdgeProperty.com.my.

According to a press release on Wednesday, July 20, BNM believes access to credit is not the only problem confronting potential buyers in owning affordable houses.

"More fundamental issues that require resolution are affordability and shortage of supply of reasonably priced houses" said the central bank.

According to BNM, outstanding housing loans continue to grow at double-digit levels, recording a growth of 10.6% as at end-May 2016.

"About 75% of borrowers (approximately 1.5 million borrowers) with housing loans are first-time house buyers" the central bank pointed out.

"The responsible financing guidelines by the BNM serve to ensure that individuals borrow within their capacity to repay the borrowings. It places a responsibility on banks to establish a borrower's income that will be available to meet debt repayments, after allowing for expenditures and contingencies.

"This is to protect and prevent individuals from falling into financial hardship due to over borrowing, which ultimately undermines home ownership as a result of foreclosures" said BNM.

BNM also stressed that it does not prescribe any lending limits; in fact, lending decisions continue to be determined by a bank's business decision, reflecting its risk appetite and strategies.

"The Bank, Agensi Kaunseling dan Pengurusan Kredit and Association of Banks in Malaysia continue to engage with state authorities to improve the process for approving applicants for affordable homes to ensure that they will also be eligible for bank financing. This includes helping individuals identify the steps that they can take to improve their eligibility for financing" BNM said.

In early May, four stakeholders in the real estate industry told TheEdgeProperty.com that one of their wishes for the new central bank governor Datuk Muhammad Ibrahim, who took the reins from Tan Sri Zeti Akhtar Aziz, was to review the lending guidelines.

The four stakeholders were Real Estate and Housing Developers' Association (Rehda) president Datuk Seri Fateh Iskandar Mohamed Mansor, National House Buyers' Association (HBA) secretary-general Chang Kim Loong, Malaysian Institute of Estate Agents (MIEA) president Erick Kho, and Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private sector (PEPS) Malaysia president Foo Gee Jen.