“The problem,” says Tony Clarke, MD of Rawson Properties, “is not that we object to the more stringent lending criteria - some of us were, in fact, lobbying for these even before the National Credit Act became law.

“The difficulty is that all too often wholly worthwhile applicants are rejected simply because their profile does not quite match the current arbitrary scorecard criteria - and in most cases there is no one to whom the applicant can appeal for a review of his situation.”

In one case, says Clarke, a 48 year old applicant who had sold his house applied for a bond to buy a home in a better area.  He had paid his bond on his previous home for some 16 years and had never once defaulted.  Furthermore the loan he asked for was no higher than what was still owed on his first bond.

To his dismay, his application was rejected - even though he had been with the bank some 20 years and, in addition to having had one of their bonds, had conducted all his business through them.

“His ‘fault’,” said Clarke, “was that he was self-employed.  Even though he could show that he had always been successful and had regularly paid his monthly bond payments on time his employment was, under the new rules, deemed as risky.”

Rawson Finance, the bond origination company, has taken up the applicant’s case and is approaching other banks on his behalf.

The 45% rejection rate on bond applications, although an improvement on the situation earlier in 2010, said Clarke, is a serious handicap to the country’s economy.  In his view, property should be spearheading South Africa’s climb out of recessionary conditions - but until there is at least a 50% increase in bond approvals this will simply not be possible.

“A great deal depends upon the banks living up to their slogans and their advertising and again positioning themselves as partners with hard-working South Africans who are striving to get a foothold on the property ladder - or to improve their position there,” said Clarke.  “Without access to the funding they require, they and many other worthwhile sectors will continue to be kept down and the economy will suffer as a result.”