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MASTER’S THESIS
“DEVELOPMENT OF MORTGAGE LENDING IN THE MODERN ECONOMY:
CHALLENGES AND PROSPECTS”
Prepared by:
Farangiz Yuldasheva
Master’s Student
Scientific Advisor:
Dr. Djabriyev A.
Analysis and ways of mortgage loans development using
the example of a housing construction facility
TASHKENT INSTITUTE OF ARCHITECTURE AND CONSTRUCTION
Faculty of Economics and Management in Construction
Annotation:
The article analyzes the current state and ways of developing mortgage lending
with an emphasis on the example of a specific housing construction facility. The article examines
the historical aspects of mortgage lending, its importance for the economy, as well as current
trends and problems faced by the market. Special attention is paid to the analysis of a specific
housing construction facility to illustrate the practical aspects of using mortgage loans. The
article concludes with recommendations for improving mortgage lending mechanisms and
identifies promising areas for further research in this area.
Key words:
Mortgage lending, Housing construction, Economics, Financial instruments,
Housing affordability, Credit market, Mortgage loan development, Mortgage lending problems,
Improvement of lending mechanisms, Government support, Development barriers, Historical
overview, Market analysis, Innovations in lending.
Itroduction
Mortgage lending is one of the most important elements of the modern economy, providing
broad access to housing for various segments of the population. This mechanism promotes the
development of the construction sector, improves living standards, and stimulates economic
growth. The introduction of mortgage loans has become one of the key factors enabling a large
number of families to acquire their own housing, which in turn has a positive impact on the
social and economic stability of society.
Mortgage loans play a crucial role in the economy, as they not only contribute to solving housing
issues but also have a significant influence on various economic sectors. They stimulate demand
for construction materials and services, create jobs, and contribute to GDP. Assessing the impact
of mortgage lending on the economy highlights its importance and the need for its continued
development and improvement.
The purpose of this study is to analyze the current state of mortgage lending and to identify ways
of developing it using a specific residential construction project as an example. The objectives of
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the
study
include:
•
Analyzing
the
current
state
of
the
mortgage
lending
market.
• Identifying key problems and barriers to the development of mortgage loans.
•
Studying
a
specific
residential
construction
project.
• Developing proposals for improving mortgage lending mechanisms.
The object of the study is the mortgage lending market, and the subject is the development paths
based on the example of a specific residential construction project.
To achieve the set goals and objectives, the study employed various methods, including analysis
of scientific literature, statistical data analysis, expert assessments, and empirical research. A
comprehensive approach makes it possible to assess the state and development prospects of
mortgage lending in the most complete and objective manner.
Main
Body
The modern mortgage lending market offers various types of mortgage loans, such as annuity
loans, differentiated loans, fixed-rate and floating-rate loans, as well as targeted and non-targeted
loans. Annuity loans, being the most popular, provide fixed monthly payments throughout the
loan term, allowing borrowers to plan their expenses. Differentiated loans involve a gradual
decrease in monthly payments as the principal debt is repaid.
Economic factors have a significant impact on the mortgage lending market. One of the key
factors is the level of interest rates, which directly affects the affordability of mortgage loans for
borrowers. High interest rates can make mortgages less accessible for broad segments of the
population, which in turn affects housing demand and slows down construction rates.
Economic crises also have a significant impact on the mortgage lending market. During periods
of economic instability, household incomes decrease, unemployment rises, and the risks of
mortgage defaults increase. Regulation and legislation in the field of mortgage lending play a
crucial role in ensuring market stability and protecting borrowers' rights.
Problems and Barriers to the Development of Mortgage Lending:
1.
High
Interest
Rates
and
Credit
Accessibility
One of the main problems faced by borrowers is the high interest rates on mortgage loans. High
rates make mortgages less accessible, especially for young families and low-income citizens.
This leads to a decrease in demand for mortgage loans and slows down housing construction.
An analysis of interest rate levels shows that they depend on many factors, including the inflation
rate, the central bank's monetary policy, the country's economic situation, and the level of
competition in the lending market. To improve the accessibility of mortgage loans, it is necessary
to develop measures to reduce interest rates, including government subsidy programs and
preferential lending schemes.
2.
Bureaucratic
Barriers
and
Complex
Approval
Procedures
To reduce bureaucratic barriers and simplify approval procedures, it is necessary to implement
automation and digitalization of processes, improve communication between borrowers and
financial institutions, and reduce documentation requirements.
3.
Lack
of
Affordable
Housing
The shortage of affordable housing also negatively affects the development of mortgage lending.
New housing construction often lags behind the growing demand, leading to increased real estate
prices
and
reduced
housing
affordability.
To address this issue, it is essential to stimulate the construction of new housing, develop support
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programs for developers, improve conditions for investment in the construction sector, and
implement policies to regulate housing prices.
Case
Study:
A
Specific
Residential
Construction
Project
A residential construction project located in the central part of the city serves as a case for
analysis. This project is a multi-story residential complex, including several buildings,
underground parking, playgrounds, and recreational areas. The importance of this project lies in
its contribution to solving the city's housing problems and improving the quality of life for its
residents.
The project is financed through private investors, bank loans, and mortgage loans for
homebuyers. Mortgage loans play a key role in financing the project, as they make housing more
accessible for buyers and contribute to the successful implementation of the project.
During the project implementation phase, several challenges arose, including bureaucratic
procedures, a high level of market competition, and a shortage of affordable housing. However,
thanks to effective project management, these barriers were overcome, and significant success
was achieved. The project was completed on schedule, and buyers gained access to high-quality
and affordable housing.
Results
and
Conclusions
To improve the situation in the mortgage lending market and enhance housing affordability, the
following
recommendations
are
proposed:
• Develop new financial instruments that address the needs of both borrowers and financial
institutions.
• Simplify mortgage loan approval procedures, automate and digitalize processes, and reduce
documentation
requirements.
• Implement government support programs for mortgage lending, including interest rate
subsidies
and
preferential
loan
terms
for
certain
categories
of
citizens.
• Stimulate new housing construction by supporting developers, improving investment
conditions in the construction sector, and regulating housing prices.
Improving the mortgage lending market requires measures to reduce interest rates, simplify loan
approval procedures, and stimulate new housing construction. Government support programs
play a crucial role in this process by lowering interest rates, improving lending conditions, and
supporting the construction of affordable housing.
Conclusion
Further research may focus on the development of new financial instruments, methods for
reducing interest rates, improving interaction between borrowers and financial institutions, and
analyzing the experiences of other countries in solving similar issues. It is important to continue
monitoring the mortgage lending market and adapt development strategies and measures to
evolving conditions and societal needs.
References
1.
Kuznetsova, L.V. Mortgage Lending: Theoretical and Practical Aspects. – Moscow:
Finance and Credit Publishing House, 2016.
2.
Makarov, A.V. Regulation of Mortgage Lending in Conditions of Economic Instability. –
Yekaterinburg: Ural Publishing House, 2019.
3.
Blackwell, T. Real Estate and Mortgage Markets: An International Perspective. –
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Cambridge: Cambridge University Press, 2018.
4.
Alexandrov, V.V. & Smirnova, O.I. Mortgage Lending and Residential Construction. –
Kazan: Kazan University Press, 2020.
