ABSTRACT

Lending the finance to enable a dwelling to be bought and the subsequent repayment of the loan with interest over a term of years has a history as long as there have been ways of recording the arrangements. There is evidence of such transactions on clay tablets in the British Museum from Babylonian and Assyrian times. On the other hand, the writer of Ecclesiasticus, probably in the third century BC, declared that ‘he that buildeth his house with other men’s money is like one that gathereth himself stones for the tomb of his burial,’ suggesting that the practice of building with borrowed funds was viewed in a rather equivocal way. Certainly the world was to divide later on this issue, some faiths seeing nothing wrong with a loan being repaid with interest at variable rates with others considering such a scheme amounted to gambling and therefore not to be considered. The Romans recorded business arrangements whereby land was purchased, divided into plots and sold on to individuals realising an overall profit in the process but with the plots bought through a financier by instalments.