Evaluation Of Mortgages Provided By Is Bank London

Aim : To analyse the effectiveness of mortgages plans which play on the economy of Turkey and foreign investments.

Objectives :

To evaluate the literature related with the theories of mortgage plans and strategies.

To evaluate the current mortgage policies implemented by the bank for non- Turkish residents.

To do a comparative analysis on mortgages policies for non- Turkish residents by other banks.

To evaluate the Conclusions and Recommendations in regards of the mortgages policies by Is Bank London to non- Turkish residents.


This dissertation analyses the effectiveness of mortgage plans which will help foreign residents to acquire property in Turkey. The project will analyse its advantages and disadvantages and its over all benefits to the economy of Turkey. Foreign investments can play an important role in boasting up Turkey`s economy.

As Turkey as a nation progresses stably both in terms of economics and to emerge politically and economically, there is ever increasing advantage to profit from property in Turkey. There are various ways with which investment can be done in Turkey; an investor has a choice of location, a choice of investment approach, a choice of target market and certainly an unrivalled choice of property assets.

I am particularly interested in planning this project because it will make people realise in London about investing in Turkey can reap of benefits to them as well as will help me to acquire knowledge of this business and will add up to my portfolio.

3.The globalisation of property markets

Throughout the 1980s and into the 1990s, property markets in many major urban regions world-wide have became increasingly internationalised. This has been more evident in what regard commercial property markets, and towards the end of the 1980s, especially offices and some sub-sectors of the retail market. In many cities transnational business organisations have become the main end-users of prime commercial property, a greater part of which produced with the involvement of international developers and contractors. Moreover, ownership of prime property has become part of transnational asset portfolios, as investors seek to benefit from the asynchronies of property and business cycles within and across national economies (Sieracki 1993, Vos 1993).

The links between the internationalisation of property markets and the progressive globalisation of the economy over the last two decades has been sufficiently demonstrated. The global dimension of many business concerns means that their demand for suitable property spreads over many countries, whereas globally- integrated management systems mean that the demand created by those users has a truly global character and requires an equal response. Perhaps more importantly, the formation of a transnational market for property has been also linked to the deregulation and globalisation of financial markets in the 1980s (Coakley 1994, Ball 1994).

Ref: NA. (1999). global players and local markets. The European Expansion of British Property Consultants and the Transformation of Local Property Markets. 10 (3), 10.



Although being a first public bank, Is bank is the biggest private bank in Turkey at the moment. It is ranked by FT (financial times) survey as 102nd in the ‚ÄúTop 1000 World Banks‚Ä? in 2008. The bank gives the largest service in Turkey and has 22,473 employees with 1,078 domestic and 27 overseas branches: that 1 is in London, 12 of them are in Germany, 9 branches in Northern Cyprus, 2 in the Netherlands, 1 in France, 1 in Bahrain and 1 branch is in Switzerland. Also it has one representative office in China.

It is the first bank that introduced ATM machines to Turkey as a Bankamatik, in 1982.

There are several business aims which carry out by financial participations such as investment banking, portfolio management and also leasing private pension. As well as increasing its success, Isbank targets to deliver good quality of product and service.

In addition, Isbank has an important role to improve the industrial sector in Turkey which also has a contribution portfolio includes most important companies in a variety of business positions.



According to Onur and Cem, Turkey is in the top 20 largest economies in the world it still lacks coherency in it housing finance system. Recently there has been an increased acknowledgement in both the private and public sector for the need to initiate and develop a better system that not only meets the requirements of the economy but also improves and helps expand its economy in similar ways to which European countries have successful done. However Turkey did act quickly to stem the costs it incurred to date due to the lack of such a system.

Ref: Housing finance in Turkey, By Onur Ozsan, Oyak Konut and Cem Karakas, 2005

Real estate researches Liam Bailey and Nicolas Barnes of Knight Frank wrote in the Financial Times that Turkey's established and higher value housing markets are worthy of buying or for the serious investor in 2009. The article highlights particular areas of where to invest in property despite property prices surging ahead along with other desirable countries and that the fundamentals like property market infrastructure, accessibility and amenities along with the countries prospects for economic growth all add favourably to the country. They state that the falling global house price situation may be the time to buy.

Governments in developing countries now realise that to have a well organised and fully functioning financial system supporting the domestic housing market can be a key component in in funnelling capital into the housing market. This can enable the development of mortgage markets which then begin to tailor products for lower income families and so help to alleviate housing poverty.

Ref: The study of mortgage markets in developing economics is receiving increasing academic attention(Lea 1994).

There are a number a number of factors leading to differences in the overall size and economic significance of mortgages. These factors include differences in the size and quality of the housing, proportions of owner occupier properties against rental properties along with the range of mortgage products available. The domestic legal framework may or may not limit the housing market. In addition to these specific factors, more general factors like the general economic environment and history of the country's housing market and it financial system as a perception by the population all influence the situation.

Lea (2000) describes an evolutionary path for housing financial systems. This usually begins with an informal lending system which over time becomes more formalised leading to the creation of specialized financial institutions. These institutions can be mutual organisations owned by the shareholders or organisations backed by governments in the form of agencies. The end product of the evolutionary path leads to market secularisation and the housing finance system becoming integrated into other financial systems and markets. The different stages of the economy will influence the level of the housing system and so producing significant differences in the system including mortgage designs.

Economics of the Mortgage Market: Perspectives on household decision making

Leece D,Blackwell Publiching 2004 UK

According to Sandes (2005) international mortgage market development varies significantly across countries. These variations are due but not exclusive to factors like the legal system, financial systems and markets, inflation rate and cultural barriers to mortgage markets. In order to develop these markets legal systems need to be modified and the mortgage market created such that affordable products are accessible to the general population.

A report published in the European Journal of Social Sciences (2008) stated that between the passing of a new law in Turkey that over six thousand separate overseas possessions connections from January 2006 till July 2006 end were completed which takes the total number of foreign owned properties in Turkey to over 62,500.

European Journal of Social Sciences ‚Äď Volume 7, Number 1(2008)

As per the report on properties in Turkey it’s been confirmed that after passing of the new law implemented in month of January-July end 2006, there were six thousand separate overseas possessions transactions which was finalised after taking into consideration total possession owned by the foreign nationals in turkey to fit in the .surplus of sixty two thousand five hundred only.

Generally mortgages in the UK are better for people looking to borrow relatively small amounts of money and repaying this from a UK income level.

The Report: Turkey 2008, Oxford Business Group.(Page 65)


Research methods required for this research will include a combination of both external research methods primary as well as secondary research.

Primary research refers to the research which involves collection of original data using an accepted research method from research participants. Primary data is generally that which is collected specifically in pursuit of particular research objectives. It is new and original data which is being used to solve the specific research problem.

For this research study, author has chosen to perform primary research with the help of interviewing ISbank official in order to collect data.

Secondary Research is an activity whereby no original data is collected, but where the research project draws on existing (secondary) sources alone. Any research activity usually includes secondary research. Secondary data is ‚Äėthe rest‚Äô ‚Äď books, statistical reports from government and other agencies, documents and so on. Secondary data is often used to solve marketing problems quickly and economically without resorting to more expensive and time consuming primary data.

Primary data can be obtained by:


Survey will be designed to collect primary data from a sample, with a view to analyzing them statistically and generalizing the results to a population. Surveys are written instruments that ask a series of predetermined questions.

In order to identify the consumer’s state of mind, it would be better to question the consumers directly through the use of a survey. A survey is required for the accomplishment of the set objectives. The survey will help to gain insights from the cases in the sample.

Surveys can be administered in several ways including in person, over the phone, by mail or online. Various methods that will be used to collect research data for the research are listed below. The methods are:

Telephone interview: This is a widely used method that will be employed. It is helpful for asking sensitive and complex questions. In this method a long questionnaire can be used for getting quality research data. This will help get people who are available over phone.

Advantages: The main advantage of telephone interviewing, from the researchers point of view, is that a number of different people can be reached in a relatively short period of time. It eliminates any discomfort that the respondent feels when facing the interviewer. Most of them are less uncomfortable disclosing personal information over the phone than on a face-to-face interview.

Disadvantages: A main disadvantage of telephone interviewing is that the respondent could terminate the interview without any initial warning. There is a problem of non-response due to the caller ID problem. Respondents will detect the number and wont respond to the call. This can be prevented by setting up a mutually agreed time

Online Questionnaires: Using web based tools a survey can be done to retrieve data from potential respondents. The data obtained can be easily exported to analysis software like Excel for further analysis. It is currently the most widely used survey method.

Advantages: It is easy to administer. The respondents can be reached globally. It is a very inexpensive method of survey. It is the most fast delivery medium. Respondents can answer the questionnaires at their convenience like the mail questionnaires.

Disadvantages: respondents must be computer literate. Respondents must have access to this online facility. Respondents must be willing to complete the survey.

Personal interview: The questionnaire can be presented to respondents wherever they feel convenient. This method is beneficial as it offers high response rates. It is very useful in asking sensitive and complex questions. It is often useful to ask long questionnaire as the interview is conducted in a convenient place of the respondent.

Advantages: The main advantage of face-to-face or direct interviews is that the researcher can accommodate the questions as necessary, classify doubts and ensure that the responses are properly understood, by repeating or rephrasing the questions. The researcher can identify nonverbal clues from the respondent.

Disadvantages: The main disadvantage of face-to-face interviews is that geographical limitations may impose restrictions on the surveys and the vast resources that would be needed if such surveys need to be done nationally or internationally. Respondents may feel uneasy about their privacy of their responses when they interact face-to-face with the interviewer.

Postal Interview: The most commonly used method of distribution which is fairly easy to administer. The questionnaire and the covering letter will be posted to the sample, usually with a prepaid envelope for returning the completed questionnaire. For this medium short questionnaire will be used.

Advantages: A wide geographical area can be covered with the use of postal interview. The respondents use their convenience to fill the form at their own pace. Anonymity of respondents is high.

Disadvantages: Any doubts that respondents have cannot be clarified. The return rates of mail questionarres are typically low. Follow up procedures for non responses are necessary in postal interviews.


Survey provides representative information about a group from which sample was drawn. This qualitative research will involve nonrandom sampling or non-probability sampling where everyone in the population will not have an equal chance to be chosen as part of a sample. The non-probability samples provide good estimates of a population characteristic.

Target Population:

The target population of my sample will include all bank employees of IS bank. The recruitment of individuals for participation will require the selection of individuals who are employees of IS bank.

The sample for the research survey will be selected mostly by these methods:

Convenience Sampling: This will be used to identify bank employees who are willing and available for the research survey. As most of the bank employees will be working and will not be available for questioning convenience sampling would be a better choice.

Snowballing: This sampling method will be used to identify the first participant. Then that first participant will be asked to refer to other participants with similar characteristics. I have used this method to select bank employees and their friends. It is easier to get representatives for research through this method that has same characteristics.

Secondary data can be obtained by:

Comparative Case studies: I will go through case studies of competitors who are offering mortgage products in the Turkey market. This will help in understanding their strategies and policies. It will also help in understanding about how they achieve their goal. It will also help in identifying the challenges they faced during marketing their products. Comparative Case Studies helps in comparing two industries and understanding their shortfalls.

Data analysis methods 

To analyse the data and get results out of it we have to do data tabulation. We can use mathematical methods for analyses, but once the data is entered into either a spreadsheet or an analysis package like Excel, other possible ways of analysing the data become apparent. We usually begin by attempting to describe particular values, their range, their central tendency, their dispersion around the mean etc.  

I will be using many of these methods to conduct data tabulation. Every method has its own advantages and disadvantages. Very simple methods are to analyse the graph and the timelines and then we can move to the complex methods like analyzing the variables.

Frequency tables  

In this method output show a list of categories (types of response) and the numbers of people responding to each. Sometimes just as a number, sometimes a percentage of the total choosing this response. When building a frequency table for interval variables, categories will usually be grouped (if not the table would probably be too long).  




Bar charts, histograms and pie charts  

This method is very important for my research. These are generally used for nominal or ordinal variables, so bars will be separated along the x axis. If using an interval variable, then a histogram would be used rather than a bar chart. It looks very similar but the axis shows a continuous interval range and adjoining ‚Äúbars‚Ä? are not separated.¬†¬†

Contingency tables or cross-tabulations 

We can set up as a frequency table including column percentages but showing both variables against the chosen categories. If one variable is suspected of being the independent variable, this is shown as a column variable not a row variable. Such tables are used to look for patterns of association in the data.  

Statistical significance 

A way of testing the level of confidence we can have that a probability sampling technique has generated results, which can apply to the full population. To calculate statistical significance, we set up a ‚Äúnull hypothesis‚Ä? ie that two variables in the sample are not related. Then decide the level of statistical significance we find acceptable, ie the level of risk that we would reject the null hypothesis (ie say the variables are related) when in fact they were not related

We should bear in mind that the likelihood of a statistically significant result will increase with sample size ‚Äď for the obvious reason that the bigger the sample in relation to the population, the less likely that any analysis on the sample will differ from the population by chance. So if we think there is likely to be low statistical significance, we should increase sample size if possible, to make the analysis more sensitive to statistical significance.

Chi Square test  

The Chi- square test is also known as ‚Äėgoodness-of-fit‚Äô test when analyzing frequencies of responses in a frequency table using cross tabulation. The chi-square test can be used to determine if there is a statistically valid difference in the relationship of data.