I refer to Philip Bowring's article on the problems of getting mortgages for old buildings and the consequences ('Old before their time', June 28). I think he wrongly blamed the banks.
From what I have found out, the blame for the existing policy of severely restricting lending on buildings over 30 years lies squarely with the Hong Kong Monetary Authority. A banker friend who has a lot of money to lend, cannot lend on old properties solely because the HKMA prevents it. He asks why there should be such a blanket policy.
The risk for the bank on taking an old flat as security can be easily assessed by a surveyors' valuation. The 30-year rule is totally arbitrary and I have not been able to find out why the HKMA applies it. There may have been reason for such a restriction if there was a recognised problem with buildings of that age which made them bad risks. The Building Regulations, in force since the 1970s, ensure that buildings have structural integrity, and many built earlier are of better quality than younger ones.
Urban renewal is one of the biggest property problems facing Hong Kong and it will get bigger. The government has no answer for funding a solution and must rely on private initiatives. The 'demolish and rebuild' strategy of the past cannot cope with the quantity of renewal required and the emphasis must be placed on rehabilitation. This can best be achieved by flat owners mortgaging old properties and refurbishing them on purchase. They then become proud owners, who force their owners' committees to maintain their buildings properly.
What better way for the government to maintain property values than by making the purchase of old flats easier, simply by putting the mortgage criteria on the same basis as for new flats. Secondary market turnover would increase, along with property values. All involved should push the HKMA to get this policy changed.
IAN BROWNLEE, Happy Valley
Guarding our food