ABSA BANK

Luthando Vutula, the managing executive of Absa home loans, says that, in the past six weeks, the bank has started to grant 110-percent home loans to applicants with a combined maximum household income of R11 000 a month. The extra 10 percent is to help consumers pay their bond registration and transfer costs, as well as other expenses, such as the cost of moving house.

Vutula says the interest rate cuts mean that consumers are experiencing some relief.

"Lower inflation and lower household payments mean that there should be a notable reduction in loans that are in arrears. These reasons, combined with the slight improvement in the property market, have led us to review our lending criteria," he says.

However, Vutula cautions that 100-percent home loans across the board are not likely to happen soon.

"Property economists are expecting house price growth to be between three and four percent by the end of the year. Given those figures, it doesn't make sense and it would be irresponsible to grant 100-percent home loans across the board.

"It is more important for consumers not to reach a point of negative equity - where the amount of money they owe on their home loan is greater than the value of the property," he says.

Standard Bank and Absa relax their lending criteria:

A relaxed lending environment is one of the biggest drivers of a recovery in the residential property market, says Saul Geffen, the chief executive of mortgage originator ooba.

In the past year, banks tightened their lending criteria and you were not able to get a home loan without first putting down a deposit of between five and 20 percent, depending on the price of the home you were buying. However, there has been a slight shift by banks. In the past two weeks, Standard Bank and Absa have announced that they will be offering bigger loans to prospective homeowners.

"We have seen increased competitiveness between the banks in the past four months and a marked increase in (home loan) approval rates across the board," Geffen says.

He says banks are targeting people who bank with other institutions.

"The move by banks to relax deposit requirements is a positive development for the property market," he says.