Habitat for Humanity addresses Africa’s unique housing challenges at local leadership conference

A Leadership Conference hosted by Habitat for Humanity in South Africa
With some of the fastest growing cities in the world over the next 50 years, Africa will encounter many challenges, including urban planning that encompasses affordable housing solutions for the growing number of urban dwellers, as well as provisions for sufficient clean water, electricity and sanitation.


This month, Habitat for Humanity hosted a leadership conference in South Africa, focused on discussing housing challenges on the continent and how to overcome them. Respected speakers from around the world took to the podium to discuss issues affecting Sub-Saharan Africa, and exchanged ideas on how housing solutions can be funded.

Addressing Africa’s unique challenges

Land tenure, access to affordable housing finance, and cost-effective construction methods and materials are some of the unique African issues that need solutions, according to Kevin Chetty, Habitat for Humanity International, regional director at Terwilliger Center for Innovation in Shelter. “Once we understand what we need to overcome, then we can work towards sustainable solutions that stay true to Habitat’s principles of self-reliance and improving systems that enable families to achieve safe and affordable shelter without needing ongoing support,” he says.

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Urban planning is another extremely important factor, with investment needed to fund urban infrastructure such as reliable power, clean water, sanitation and transportation, which in turn will boost economic development. “Many African countries can’t keep up with the huge influx of people into urban areas, making it near-impossible to provide people with adequate housing, let alone an infrastructure that can handle the momentous task of providing electricity, running water and sanitation, which should be available to all,” says Chetty.

Africa also needs a variety of affordable housing solutions for the growing number of urban dwellers, from housing microfinance to public schemes, and alternative construction methods and materials. “This conference brings together people from across the continent as well as Europe to share their successes and challenges and helping us all to achieve Habitats global vision,” says Chetty.

Housing is a process, not a product

Housing is complex, and can’t be seen in a linear way. “A linear approach that looks for a simple cause and effect will most likely lead to a simple solution, and won’t address the totality of challenges that make up this dynamic system that is ever-changing and not static,” explains Chetty.

Understanding and recognising the complexity of housing, and moving beyond the traditional approaches to housing as a product is an essential step. With this new understanding, a successful people-centred integration of knowledge, financing, stakeholder mobilisation, and programme and policy interventions can be made.

A house is an asset, not just for the family living there, but also for the community as whole. Empowering the community and building them up to be sustainable will create positive systemic change.

Housing microfinance

In the developed world, housing finance is synonymous with mortgage lending and represents one of the key building blocks of the banking sector. In less-developed countries, mortgages are accessed by as little as 1% of the population.

In Africa, the poor have invested the most in their housing, and nearly 80% of housing is self-financed. Housing microfinance is particularly suited to the building and financing needs of the majority of Africa’s population, as homes are built informally with local materials and unskilled labour.

Chetty points out that financial service providers are discovering that vast business opportunities exist within the lower-income housing markets of the developing world. “The Terwilliger Center for Innovation in Shelter has had a successful project running in Kenya, and we will be replicating this in South Africa in order to give the majority of the population access to microfinance and see the dream of having a home come to fruition,” says Chetty.

Source: Bizcommunity

Most Low Income Earners Can’t Afford Monthly Rent Above N11,000 – LASURA

Lagos State Urban Renewal Agency (LASURA) has says that majority of low income earners in Lagos could not afford house rent of more than N11,000.

LASURA General Manager, Lateef Solebo, disclosed this on Thursday at an interactive session on `Achieving Affordable Housing in Lagos’ at the public screening of a documentary drama entitled `Kelechi’s Quest’.

The documentary drama was scripted by Nollywood actor, Kelechi Udegbe, on his challenges in getting affordable accommodation in Lagos.

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“I conducted a research with my staff to know how much the low income earners can really afford; what we found was that majority, which is 74 per cent of low income earners, can only afford N4, 000 to N11, 000 monthly as rent, this group include people like artisans and traders.

“So, how can we afford low income units for these kinds of people. Someone asked what happened to the ‘face-me-I-face-you units’ we used to be popular back in the days which people could afford.

“But now we have single room units which cost much higher; we have to create a very good database and project in the next five years on affordable housing,” Solebo said.

The LASURA boss said Lagos had to address the challenges of segregation in which there were high concentration of the wealthy and the poor in order to achieve an egalitarian society.

“Urban planning studies show that if you concentrate majority of the poor in the same areas you have various problems associated with crime.

“If various classes are mixed, for example, the poor with the middle income, the poor will be reoriented and emulate the habits of the middle class.

“This will make them aspire to achieve more, this is a new concept in planning,” he said.

Solebo noted that there were no laws that resettle individuals displaced by government, adding that LASURA had created a redevelopment law to address the issue.

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He urged Lagos State government to partner with the private sector, NGOs and international organisations in creating affordable housing similar to Single Room Occupancy (SRO) units in other African countries such as Kenya.

Mr Tayo Odunsi, the Chief Executive Officer (CEO) of Northcourt Real Estate emphasised government’s role in providing affordable housing for its citizenry.

Represented by Ayo Ibaru, the company’s manager, Odunsi said government policies have to be dynamic and flexible and must reflect the modern reality of affordable housing.

“You cannot say that a property built in the sixties is designated for only residential purposes when demographics have clearly changed.

“The problem of affordable housing has a lot of faces like segregation and globally, cities have come to realise that segregation is not in their long term interest.

“The fact that people do not belong to certain classes does not mean they will not be catered for; anyone approaching the concept of mixed housing must address certain issues to avoid problems that can arise from a segregated society,” he said.

Dr Bashirat Oyalowo, Director, Center for Housing and Sustainable Development, said one of the challenges of achieving affordable housing in Lagos was the Land Use Act.

“The intent of the Land Use Act was to make land accessible to citizens but the application is not the case as it has made land inaccessible; even the government has difficulty acquiring land.

Oyalowo said that only seven out of 17 Public Private Partnership (PPP) projects recently initiated by Lagos State Government actually kicked off.

“The reason for this is because developers could not access the land, the power of allocation lies with the government but the power of access lies with the ‘Omo Onile’ (Land grabbers).

“The Land Use Act is inaccessible because it is enshrined in our constitution, for us to make a change, we have to do intense lobbying in Abuja,” she said.

Udegbe, who played the star role in the documentary drama, stressed the need for land to be affordable in Lagos.

“Land is the greatest challenge in housing in Lagos, if land can be cheaper people are ready to build the basic structure, government should make land affordable for the masses,” he said.

Source: PM News

5 ways to save for your first home

First things are special. A first house would top this list — an abode for ourselves. Real estate is expensive and it needs significant planning and savings to be able to afford it. Here are a few ways to maximise your potential to save for your first home.

1. Make strategic use of your savings account

It’s better to maintain a separate savings account to pay for your house. A measure of financial discipline lies in how effectively we commit and not withdraw from such accounts unless it’s for the payment of the house. Maintain the savings account this way until you buy your dream house. The down payment plays a major role in buying a home and reduces the monthly payments you make on your home loan. Most UAE banks have a mandatory 20-25 per cent of the mortgage loan as the down payment. It’s advisable that when saving for your home, you maximise the returns on such savings. While keeping your money in your savings account is of zero risk, you can obtain better appreciation for it if you rather invest in medium-risk mutual funds for moderate returns.

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2. Make a savings goal

The path to the savings goal is steep, and it requires changes in financial discipline. As soon as you receive the monthly paycheck, always make it a priority to save a considerable amount — say 10 per cent of your income for the house before spending the remaining.

“You can reduce shopping using credit cards, debit cards or even buying things online as intangible money is easier to let go of. Instead, prefer cash to buy things as that gives you a clear picture of what is spent.”

 – Shiv Kumar Gupta 

 

This way, you are doing yourself a favour by not putting yourself under the claws of unnecessary expenses. Not only this, you can also cut down unnecessary expenses by living frugally. This can save tonnes of money in the longer term. Also, you can reduce shopping using credit cards, debit cards or even buying things online as intangible money is easier to let go of. Instead, prefer cash to buy things as that gives you a clear picture of what is spent.

3. Grab that second job

A second source of income can bridge that gap between the earning potential of your current job and the savings you need for your first house. Never lose an opportunity to have that second source of income, which can be dedicated to your home purchase. This way you can utilise one source of income for all your daily expenses and the other for your savings. The second job you choose can be a part time job or any job that expresses your talent. Nowadays there are many options to pursue a second career both offline and online. You can be a blogger, a tutor of any sort, a freelancer etc.

4. Maintain a budget

Having a budget is an evergreen tool when it comes to savings and investments. The key essence of a budget is that you are always in control of where you are spending your money. It helps to cut down those impulsive purchases no matter how shiny, tasty or even worthy things may seem if it disrupts your budget. Avoid all the things that are non-essential. The golden rule of budget is that your income should always be greater than expenses. Since we are saving up for a home here, your expenses must factor in the amount you are committed to save every month. Finally, if your total income is less than total expenses, then you need to immediately think of the ways to cut down your expenses.

5. Investments

It’s advisable to save for your down payments and other expenses via investments. Different types of amicable investment options are available including stocks, mutual funds, real estate etc. Make sure to maintain a healthy balance of high and low risk investments, and invest only after you have enough cash for emergency and living expenses. Mutual funds can be opted if your choice is an easy way of investment with good returns. Please be advised though that markets are volatile and you need to exert caution and look before you leap.

Source:  Shiv Kumar Gupta

Modular homes could save first time buyers money, it is claimed

First time buyers in Britain could collectively save £1.3 billion annually if more modular homes were available to help them on the housing ladder, it is suggested.

Changing the way new homes are constructed homes could reduce the cost of building a property by around 20%, a saving that could be passed directly to first time byers, according to research by modular housing specialist Comfortable Living.

It says that on average across the UK a residential detached house costs £1,230 per square metre to construct. That’s £82,394 for the average UK house of 67.8 square meters but once you allow for external works at another 20%, a 15% risk allowance, and a builders fee of 10%, the cost rises to £126,592.

However, Comfortable Living points out that it can supply a property for 20% below this cost, resulting in a saving of £25,318 for the average buyer and adds that as 29% of new homes are sold to first time buyers, this equates to 53,000 homes which last year would have saved first time buyers £1.3 billion.

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The firm also points out that it could make new homes accessible to first time buyers without the need of the flagship Help to Buy scheme.

Comfortable Living offers a range of standardised modular homes ranging from two, three and four bed options. They are manufactured in the UK and meet the high standards set for housing in the UK.

The homes are approved by the NHBC, the UK’s leading warranty and insurance provider for new homes, qualify for Homes England grants and approved by the main mortgage lenders as well as being compliant with the National Design Space Standards. They are also energy efficient, come with a no quibble guarantee and freehold.

‘Modular housing can provide a realistic solution to at least help address the current housing crisis. Of course, like the traditional process, the overall cost is relevant to the cost of the land for any given plot, but the construction cost and time can be drastically reduced through the modular construction process,’ said Saadat Khan, chief executive of Comfortable Living.

‘We can assemble a house in less than a week at our facility and once delivered on site, it can be erected in just half a day with the money saved passed onto the homebuyer, not pocketed as profit,’ he explained.

‘Had the small proportion of new build properties that were built and purchased by first time buyers last year been done so through modular construction, the savings would have been vast,’ he added.

Source: Property Wire

‘Real estate is not growing because we have the most difficult transaction laws’

Though a critical sector with great potential to bring a positive turnaround in the economy, real estate is not growing in Nigeria for reasons that are as nebulous as they are mundane. In this interview, EREJUWA GBADEBO, CEO, International Real Estate Partners (IREP), links the sector’s slow growth to land laws in the country. She also speaks what IREP as a foreign service provider is in Nigeria to do differently, plus other issues relating to real estate transactions. She speaks with CHUKA UROKO.  Excerpts:

Yours is a foreign firm offering real estate services in Nigeria’s crowded market. How are you doing it differently?

In a nutshell, IREP, which stands for International Real Estate Partnership, is essentially a real estate services company. What we are doing is providing real estate services that are of the same quality with what you find anywhere else in the world.

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We are trying to do it differently because we are a member of a consortium of partnering companies which are all around the world with different specialties.  The idea is that an investor who wants the services of any of these partnering firms will come to us and we will fish around for our partners and that will add value to the investor.  We want to bring a plethora of specialties around the world that can add value to what the investors offer. We serve as a one-stop shop for clients.

For reference purposes by potential investors, who are those your foreign partner?

Our partners, as I said earlier,  are all over the world. We have a leading financial services partner in China whose specialty is in real estate. They are in Beijing, Shanghai, Hong Kong, Moscow, etc. If, for instance, you have an investment in any of these countries and you need financial services, we can link you up to this partner to provide you with the services.

We have another company in America called Global Expansion Associate and their specialty is in providing turn-key developments across financial services. So, if you have need for any turnkey financial solutions, they are the ones to go to, but you will be dealing with IREP.

We also have a multi-disciplinary interior architectural services company who are in South East Asia. If you have land to do office development or you want to do feasibility studies here in Nigeria, or you need funding, you just meet us and we help you access their services.

We have got another interesting partner specialized in verification, testing and certification. So, any one that has a building  and wants it tested or certified, they can help him to get certified to ISO.  We also have what I can call real estate transnational service company.  If you want to bring in foreign investors and you don’t understand their language, this is where you bring in this company to help you out. They  understand the language of real estate and can put together your contract in such a way that you are not short-changed.

In providing advisory services, to what extent do you influence client’s design and decision?

All that we do are geared towards helping the real estate industry. You can work hard on a building that has nothing to offer the industry and so nobody wants to touch it. There is a typical example of such building in Victoria Island. It is a commercial building and nobody has event stepped into it. A little bit of market research before the building was started could have helped the developers to create a better solution. 

On the contrary, everybody would like to work on skyline buildings like Heritage Place and The Wings Towers which have been completed, and the Desiderata Tower on Banana Island which is still ongoing. There is another one we are involved in and we have influenced a lot of things in the building. It is a naira-lease project and this means there are no worries about fluctuation  in exchange rate.

The point I am trying to make is that upfront information is very vital and people generally ignore them to their own detriment in the long run. If you put up a gigantic building that is difficult to maintain, nobody will go there. And when the mistakes are made, it is difficult to correct them in the long run.

 

After some months in Nigerian market, what has been your experience; what impression of the market do you have?

IREP is new in Nigeria but all of us who work here have been around a long while. The market is difficult, and my challenge is the assumption that because the oil price has gone up, everything in Nigeria is appearing to be out of recession. Actually, the recession in real estate is different. The sector has been in negative growth for eight consecutive quarters and in this last quarter of 2017, the growth was -5.09 percent. This was lower by -1.8 percent than the previous quarter.  That quarter was less traumatic but it was that bad. Year-on-year,  the sector’s growth was -3. 25 percent lower. All these impact on pipeline projects. As a result of this too, construction cost has gone up and so has real estate services.

What, in your view, is wrong in the real estate sector that is limiting its growth?

I think there is something we are not telling ourselves and that is annoying for me. There is a huge gap between where we are and where we are supposed to be. In my view, real estate is not growing because we have  the most difficult transactional laws in the real estate market. You cannot tell me that someone who owns a property cannot sell to whomsoever he likes at whatever price he wants. Here, you have to go back to the government that did not help you to build the house for permission to sell the property. This is why our land is expensive and registration is difficult and takes so long such that transactions cannot happen at the kind of speed they are need to.

 

Which of the land laws are you referring to—the Land Use Act or the Lagos State Land Use Charge? What do you say is wrong with the laws?

When I talk of the land laws I mean everything whether it is federal or state government laws. Let us look at the Lagos Land Use Charge, for instance.  Lagos State government has made matters worse by changing the land use act which had started making life easier for Lagosians. Before now, we had rates which the landlord and the tenants had their respective responsibilities to pay.  Now, they have made it punitive and it is coming at a time when people are running away from real estate sector and the market.

What they have done has the capacity to scare people away from Lagos to neighbouring Ogun State. Recall that during the time of the crisis in the Niger Delta, foreign workers or investors who had business in Nigeria chose to stay in Ghana and flew from there to Nigeria and back after transacting their business. We did not learn from that and it means those who have property in Ogun should start thinking of moving to such areas and have their peace.

I believe there won’t be a reduction in the population of Lagos, but there is certainly going to be a reduction in the number of those who would pay the tax, leading to millions of citizens that would be out of job.

Source: Chuka Uroko

Why FMBN’s new affordable housing programme comes with a difference

PIC. 12. A CROSS-SECTION OF FMBN AVIATION VILLAGE INAUGURATED BY PRESIDENT GOODLUCK JONATHAN IN ABUJA ON THURSDAY (13/2/14). 883/13/2/14/BJO/NAN

If there is anything that inspires hope in the new national affordable housing delivery programme  which was launched recently by the Federal Mortgage Bank of Nigeria (FMBN) in collaboration with leading labour unions in the country, it is because the programme differs significantly from other housing programmes undertaken in the past by government or its agencies which almost always ended up as white elephant projects with grave implications to the national economy.

Nigerians have, in the past, seen so many housing programmes initiated by state and federal governments or/and their agencies which ended at conception level, mid-way into construction and, in some cases, at near-completion level, leaving behind a pile of wasted efforts and resources.

Among several others including the Shagari Low Cost Housing, Nigeria has had social housing projects which failed, in part, because they were executed without taking into cognizance the concerns and economic realities of the Nigerian worker and other potential buyers.

However, the recent launch of the National Affordable Housing Delivery Programme for Nigerian workers in six locations across the country by the Federal Mortgage Bank of Nigeria (FMBN) in partnership with leading labour unions in the country is coning with a difference.

There are many reasons to believe that this affordable social housing project will succeed and not go the way of abandoned national projects. Finance is a major drawback in housing delivery but the availability of funds for the new programme guarantees that the delivery is sure.

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FMBN is leveraging its pool of funds from the National Housing Fund (NHF) to finance the construction work and delivery of the project. Selection and mobilization of competent developers is also another guarantee and the apex mortgage bank has already mobilized reputable indigenous developers with the capacity to deliver to start construction work on the project.

Another basis for hope in this programme is the strategic involvement of state governments as critical stakeholders in its implementation. The selection of the pilot sites was done based on the responsiveness of state governors to the conditions of the FMBN for siting the project. This helped in the speedy acquisition of expansive pieces of land for the housing estates.

It is expected that the support from state governors whose workers will benefit directly from the scheme will indeed help to ensure timely project completion and delivery to deserving workers.

The active involvement of the labour unions in the design of the program is a major plus for the project and equally gives hope that it will succeed. The participation of leaders of NLC, TUC and NECA in the development of the framework for delivering the project made it possible for them to make constructive inputs into the housing designs, selling prices and conditions for delivering the project. This has given them a strong sense of ownership of the project which is considered a critical factor for its success.

The housing programme, which is designed in collaboration with the Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and the Nigeria Employers’ Consultative Association (NECA) is a good addition to the efforts of FMBN as a strategic policy tool of the federal government to increase access to affordable housing by low- and medium-income earners in the country.

Under the pilot phase of the project, about 1,400 housing units comprising one-bedroom, two-bedroom, and three-bedroom units are planned for construction and delivery at 14 sites nationwide. 200 housing units are to be built in each of the six geopolitical zones with 100 units in two selected states while Abuja and Lagos are to be treated as special sites.

A defining feature of the programme is the fixing of the selling prices of the housing units within a range that workers can afford with their salaries. The prices are to range from N3.1 million to N8 million which marks a departure from the worrying trend of building houses that are far beyond the financial capacity of low- and medium-income earners.

The rapid and simultaneous commencement of construction activities at various sites in five states including Nasarawa, Kogi, Abia, Enugu, and Akwa Ibom inspires hope for the speedy delivery of the projects within the 6-months timeframe as planned.

In Nassarawa State, for example, the state governor, Tanko Al Makura, provided 5 hectares of land for the project and at the groundbreaking event recently, the governor promised to commit an additional 10 hectares for the project. In Kogi State, the governor, Yahayah Bello, provided 37 hectares of land for the project on the outskirts of Lokoja. In addition to the land, most of the governors have also indicated strong willingness to provide access roads, electricity, and other associated amenities.

“The launch of the National Housing Delivery Programme is a momentous development because it marks the first time that FMBN and the labour unions have worked closely with experts and industry stakeholders to develop a realistic and acceptable framework for delivering affordable housing to Nigerian workers”, noted Ahmed Dangiwa, FMBN’s CEO, at the groundbreaking event in Nasarawa.

Dangiwa reasoned that the collaborative spirit which this programme has fostered gave room for labour leaders, who understand the realities and financial challenges that Nigerian workers face, to make constructive inputs to the housing designs, pricing range and other relevant conditions for delivering this project.

The stakeholder involvement and contributions to the project design makes the programm a fit-for-purpose tool that will deliver houses that workers can afford as part of the overall national efforts at redressing the huge housing deficit that experts now estimate to be over 22million housing units.

Dangiwa assured of a plan already in place to ensure that once the houses are built and delivered, the FMBN will provide mortgage loans through selected Primary Mortgage Banks (PMBs) to Nigerian workers that contribute to the NHF to enable them to purchase the houses and repay over a maximum period of 30 years.

Eligible workers whose loan requirements fall below N5 million will not be expected to make any equity contribution to access the facility while those requiring N5 million – N15 million will have to provide only 10 percent equity contribution instead of the old requirement regime of 20 percent and 30 percent.

The housing delivery programme is especially significant because of its conceptual focus on delivering cost-effective, safe, decent, quality and affordable housing. The direct commissioning of the bill of quantities by the FMBN to suppress the profit motive and the strategic engagement of state governors for the provision of land at near-zero cost has helped greatly to substantially reduce the cost of the building and keep the selling prices within the reach of Nigerian workers. This combination of quality and affordability makes the program a fit-for-purpose model for social housing in Nigeria.

The programme demonstrates yet another important and impactful initiative that the FMBN is driving to add zest to Nigeria’s quest for social housing. This is which it has become necessary for the government and stakeholders continue to support the bank’s initiatives such as this and upscale it to reach even greater numbers.

“If the bank has shown that it can achieve this much with a capital base that is just about N5 billion, government needs to continue its professed support and quickly progress its commitment to the re-capitalization of the bank to the tune of N500 billion in the next five years  as planned.

With such additional funding,  it is hoped that FMBN will have more financial leverage to fund and upscale its projects and indeed rise up to the occasion and ignite a social housing revolution in the country. The current level of housing deficit demands immediate action by government and all stakeholders. Recapitalizing FMBN is a good way to start since it now represents the hope of the common man for decent, quality and affordable shelter.

Source: Chuka Uroko 

Mortgage for first time home buyers: Lessons from the United Kingdom

In almost every field of activity, Nigeria has one or two lessons to learn from its peers and, in housing or real estate generally, the country has a lot of gaps to bridge in mortgages, property registration and alternative building techniques for mass housing.

Unlike Nigeria where first time home buyers who are predominantly low income earners do not have any kind of support from government to enable them to own homes, first time home buyers in the UK and others with small deposits draw attention from government which was why, in September, they took a greater share of the housing market than in the previous month, with overall approval levels also up compared to August.

While there were 66,704 mortgages approved during the month of September, the market may have been affected by continued impact of the Bank of England’s base rate rise in August as there were fewer borrowers with large deposits.

According to the mortgage market monitor from residential chartered surveyors e.surv, large deposit borrowers, defined as having a deposit of 60 percent or more, accounted for 30 percent of the market, lower than the 32.5 percent recorded in August and the 33.8 percent seen in July.

In Nigeria, none of the built environment professionals, not even the estate surveyors and valuers, keep record of mortgage transactions in the country and, again, because mortgage transactions are in fits and starts, nobody cares to know who takes mortgage loans and from who.

The primary mortgage banks (PMBs) are challenged in so many fronts, especially with low capital base, low clientele base, non-performing loans and low housing stock on which mortgages could be provided. They hardly lend to home seekers and the few that do make impossible demands from borrowers.

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But in the UK, small deposit borrowers saw a growth in market share month-on-month from 22.8 percent to 24.2 percent between August and September. Meanwhile, mid-market borrowers also saw an increase in market share to 45.8 percent of the overall market, compared to 44.7 percent the previous month.

Propertywire, an online residential property platform, quotes Richard Sexton, director at e.surv, as saying that September was the first month many home owners would have received their new, higher mortgage bills if they are on a standard variable rate (SVR).

“But first time buyers were not affected by such matters, and there was a strong increase in the proportion of the market occupied by these borrowers. Young buyers may have been helped onto the ladder by the fact that house price growth has slowed across many areas of the country. Lower prices mean that would-be buyers can achieve their dream of home ownership much sooner, and this appears to have been borne out by these figures,” Sexton said.

“With existing home owners trapped on expensive standard variable rates (SVRs) now feeling the cost of higher mortgage rates, the remortgage market cannot be under-estimated and activity was up compared to last month and September 2017,” he explained, adding, “despite the rate rise, new mortgage borrowing is still very competitive and home owners will continue to be tempted by cheap fixed rates. This will protect them against future base rate rises”.

When broken down on a regional basis, the figures show that every part of the UK saw a smaller proportion of loans given to large deposit borrowers than a month ago. London continued to be the market most dominated by these borrowers with 40.5 percent of all loans going to this segment of the market.

Close behind was the South East on 37 percent and then the South and South Wales on 32.7 percent. In contrast, some 20.3 percent in Yorkshire had a large deposit. This was ahead of the North West and the Midlands, which both saw 24 percent in the month.

Four regions, Northern Ireland, the North West, the Midlands and Yorkshire, saw a greater number of loans go to small deposit borrowers than their large deposit counterparts. In Yorkshire, some 33.5 percent of loans were to first time buyers and others with small deposits.

Elsewhere, in the North West some 30.4 percent of all loans went to this part of the market while in Northern Ireland this ratio was 28.9 percent. The final region to have more small deposit borrowers than those with large deposits was the Midlands, with 28 percent of loans going to the former category.

London, once again, was the market with the fewest small deposit buyers. Just 13.8 percent of all loans went to this part of the market during September, ahead of the South East at 19.4 percent.

 “Every single region reflected the national trend and saw a greater number of smaller deposit borrowers, while those with larger amounts of equity were squeezed. Those with small deposits in London and the South East still face a much harder time than those in the north and Northern Ireland. However, the slowdown in the capital will help more get onto the ladder in future months,” Sexton hoped.

Source: Chuka Uroko

Delays in land title processing hindering development

MR. ADENIIJI ADELE is the President, Nigerian chapter, International Real Estate Federation (FIABCI). He is also the Principal Partner, Adeniji Adele and Associates and senior member, Nigerian Institution of Estate Surveyors and Valuers. He spoke to CHINEDUM UWAEGBULAM and VICTOR GBONEGUN on the proposed International Real Estate Consultant designation for professionals in the industry, ways to resolve pitfalls in housing delivery and ensuring effective land administration in the country.What has been the major objective of International Real Estate Federation (FIABCI) since it came into being?FIABCI has been in existence for some decades and with chapters in over 60 countries of the world.

We have an Africa region President and Nigeria chapter president for the association, which I currently oversee.

The Nigerian chapter came into existence in 1972, kudos to our founding fathers.

We are a non-political entity whose objective is to help members add an international dimension to their businesses.

FIABCI helps members acquire knowledge, develop networks, and optimize business opportunities all over the world.

Our members include, town planners, chartered surveyors/valuers, architects and business entrepreneurs, insurance experts, financial consultants and those who have something to do with real estate industry.

FIABCI unites all members under one-umbrella and share common basic values. We are against all forms of discriminations.

The association is becoming very proactive in sense that it looks at the needs of real estate members and share knowledge on the profession through experts’ contributions to current global issues in the industry.

FIABCI also gives room for transparency because we deal with various clients across the globe as well as add international dimensions to activities, especially as it concerns new innovations in real estate through business networking.

Currently, FIABCI is advocating for housing for all citizens, we believed that every Nigerian must have a home.

How do the FIABCI’s Business club of real estate professionals increase membership?

The business club is an arm of FIABCI and it’s all about promoting international connections through on-line and exchange of correspondence/collaborations among the professionals including those from the academics.

We ensure membership drive, get feedback from current members, keep existing members happy, provide a personalized membership card and bring the renewal process early.

It has become a brand because across the globe, especially in Europe and America.

A new designation known as the International Real Estate Consultant (FIREC) is being offered to practitioners in Nigeria, What are the benefits? Who can benefit from such awards, is it only Estate Surveyors and Valuers?

It will provide opportunity for interactions with professionals, whereby we will be exchanging ideas and forecasts in the market trends.

We will also compare and be able to focus on specific areas such as, housing, interiors or designs and other segments.

It broadens horizons and improves skills. Our principal members are from Nigerian Institution of Estate Surveyors and Valuers (NIESV), we are about 100 members in the country now and we hope to grow by creating awareness and bring in lawyers, developers, real estate brokers and others as members.

This week, FIABCI is hosting the Federation International Real Estate Consultants (FIREC) programme on ‘Investment real estate and global real estate perspective’ in Lagos with international facilitators like, Principal, World Citizen Consulting, Bill Endsley, Former President National Association of Realtors, United States of America, Richard Mendenhall and President, National Association of Realtors, USA, Elizabeth Mendenhall expected to train our members.

It’s just an award to members who have completed an average of 40 hours in terms of academic reports, continuing education and what we called the Continuous Programme Development (CPD).

Once the professionals sit for the programme, they would have the certification.

The coming of these experts, would give opportunity for NIESV to enter into partnership and synergy like in the areas of exchange programmes that meet up international standards and best practices.

How do FIABCI ensure greater transparency and consistency within global property markets, especially in Nigeria? What could be done to issues of foreign firms having an edge over local practitioners?

We believed in open communication in dealings with all clients. All information must be correct and accurate.

That is why we have sought total collaborations with all professionals to have integration of ideas across the board.

As a member, if you are not transparent in business, you could be liable and sanctioned if your opinions are found to be wanting.

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Local players in real estate need to improve upon the way we practice.

We can’t be talking about incursion until we improve on the way we do things. Local practitioners need to stick to the fundamentals of the principles/core values of the profession.

Foreigners don’t deviate from ethical standards; they examine issues very well and offer most innovative solution for clients.

But in this part of the world, we don’t even have adequate training, no international drive to increase knowledge apart from the local content.

We still need greater proficiency in the way we treat clients and carry out the business.

To move forward, we could create a synergy among us with a little mixture of international experts on board to make progress.

We also need to retrain and involve in specialization to be better than the likes of Broll and Knight Frank who are foreign operators.

We also need to reposition/rebrand ourselves and staffs for productivity as well as give value/solution to clients who transact businesses with us.

What is the way forward in solving Nigeria’s housing shortfalls?

The challenges in the industry hinges on so many factors, which include, environmental factor, government legislation and policies, administration of land, which is no longer available to common man.

The state governments control land and professionals also have a role to play.

Also the rising cost of development coupled with the huge issue of funding. Most states, local government and the federal government find it difficult to develop housing; so we need to seek for alternatives.

The most important question is, can the government make the land available to an average citizen at a cheaper rate?

Government affordable housing is not cheap for low-income earners and I don’t blame government because the cost of development, building materials for those units of housing is very high and the cost of paying labourers and artisans have gone up compared to what it used to be in the past. Urban migration has also increase the demand for housing.

Apart from that, the infrastructural deficits in Nigeria are very huge and frustrating.

We lack good road networks, poor drainage, planning and enforcement of zoning laws, potable water and electricity, access to low interest finance/mortgages among others.

If the infrastructure is available, it will reduce the cost of housing development by the public and private sectors. Resolving Nigeria’s huge infrastructural deficits, will improve housing provision in the country.

There is a kind of haphazard development everywhere; most of the local and urban centres are not well planned.

Each of the states should make land available to the federal government to build houses for the masses to cushion the effect of the huge number of units that is not available.

Government must decongest Lagos and other urban settlements and we should have various sub-divisions that are doing well like we have in the United States of America. Total land reforms are needed in the housing sector.

The year is gradually coming to an end, what has been the pulse of the property market. How did the market fair this year?

There has been lull in the market, and few pockets of sales. In terms of the retail segment, we don’t have new malls because the cost of building is no longer easy, let alone people taking them.

A lot of tenants who could not sustain the rents in mall are looking for smaller spaces.

The issue of sustainability became a big problem in terms of power supply and other maintenances. The new trend is that mall must be a ‘one stop shop for everything’.

In the residential segment, not many people are buying properties this days, people are trying to be careful despite the fact that prices are a bit low in highbrow locations like, Banana Island, Ikoyi, Victoria Island among others.

The big boys are crying and there is capital flight. The stock market is a bit down too, in the past two weeks, it has been on the negative side.

People are moving out because of the political uncertainty and this has been the trend since the beginning of 2018.

CBN warned recently that the economy might fall back into recession, how will it affect the real estate sector if their predictions come to reality?

Certainly it will affect the industry because most of the construction works would be abandoned due to challenges of funding.

As a matter of fact, that would worsen unemployment rate and most of the professionals may not get work again.

There would be quackery in the industry on a large scale. Existing facilities may also decay and occupancy ratio of properties would go down because people will find it difficult to pay their rents if there is any recession again in the built industry.

Professionals would need to be very resilient, upright in dealings, keep the client through value addition to service and be focus to be able to survive and get a lot of referrals. Operate an open book policy.

In Nigeria less than five per cent of the land holding is titled. What are the challenges and how can the governments ensure effective land management?

The poor land management system is as a result of bad administration and poor education about land administration.

States face a lot of challenges in terms of documentation, archiving, and managerial capacity as well as land information/card index.

A lot of people would want to do transaction on land but because there are no titles, most banks wouldn’t attend to their request.

A lot of delays are encountered to get titles on land. Government needs to go back to the drawing and ensure effective electronic land title and Certificate of Occupancy application process.

Delays in the processing of land titles hinder developments and reduce governments’ revenue.

Having a good administrative capacity for land management. Plan for sustainable management of land and other natural resources on and beneath the land.

Improve market access, regulations, governance and reform land ownership with productivity and inclusiveness in mind.

We also need policy sustainability on issues of land administration. As long as we have many bottlenecks, investors would be cautious to invest their money in the sector.

What are your predictions for Nigerian real estate in 2019?

I’m not a prophet, but I must say that if we have a stable government, the property market and the economy will improve.

Importantly, by the time we get to the second and third quarters, if there is stability, the economy will be better.

The main factor is infrastructural deficits; government must aggressively address the problem and improve legislations as it affects land matters.

Kogi allocates 37,000 hectares of land for housing

The Kogi State Government has made available 37,000 hectares of land for the construction of affordable houses for workers.

Governor Yahaya Bello announced this at the ground-breaking of the scheme in Lokoja.

He said N10bn had been set aside for the 1,200 housing units to be built for workers in the state.

The governor stated that the initiative was in partnership with the organised labour, comprising the Nigeria Labour Congress, Trade Union Congress, and the Nigerian Employers’ Consultative Association.

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Bello said the initiative was in furtherance of the Federal Government’s commitment to providing affordable housing for all workers.

According to him, everyone deserves a decent home, promising that the government would not leave any stone unturned in realising this objective.

Source: Gbenga Odogun

U.S. housing market faces ‘5-percent’ test

NEW YORK (Reuters) – The U.S. housing market, already struggling with tight inventory and rising building costs, faces a fresh headwind as 30-year mortgage rates rise close to the 5 percent threshold for the first time in years.

Even as home prices have climbed steadily thanks largely to a lack of supply of homes for sale, housing affordability has remained relatively stable thanks to historically low borrowing costs.

But that is changing. Mortgage rates have surged to 4.97 percent from 4.23 percent in January, according to the Mortgage Bankers Association. Including fees, most 30-year mortgage costs have reached 5 percent or higher.

The rise in mortgage rates so far this year means a potential homebuyer would pay about $35,000 more interest on a $220,000 loan over 30 years.

U.S. borrowing costs have risen broadly as the Federal Reserve has raised its benchmark lending rate from near zero three years ago to between 2.00 percent to 2.25 percent after the central bank’s policy meeting last week. It signaled rates would rise further in the months ahead.

The central bank has also been reducing its holdings of mortgage bonds purchased in an unconventional policy adopted during the 2007-2009 credit crisis. Yields on the bonds that exert the most influence on mortgage rates have climbed as investors demand higher compensation on a pickup in inflation and economic growth from the tax cuts enacted last December.

“Higher interest rates is a headwind for housing, but it’s not a major obstacle right now,” said Ward McCarthy, chief economist at Jefferies & Co. in New York.

Some economists believe home loan costs have to increase much higher to cause a slump in housing activity.

“We need to see rates rise another 100 basis points to see a substantial drag,” said Aaron Terrazas, senior economist at Zillow in Seattle.

HOUSING SECTOR SPUTTERS

Residential property sales in 2018 floundered due to low inventory and a land shortage for developers to build new homes.

A dearth of available workers and rising material costs, stemming in part from tariffs, have hampered the sector, analysts said.

Home resales softened this spring, typically the strongest season. They stabilized at 5.34 million annualized units in August, but remained down 1.5 percent from a year ago, according to the National Association of Realtors.

Inventory of existing homes rose to 1.92 million last month, the first increase in three years on a year-over-year basis.

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New home sales fell for two straight months before rebounding to an annualized rate of 629,000 in August.

While new home sales make up a smaller portion of the overall housing market, they are seen as more critical to economic growth because they help drive consumer and construction activity.

HOME AFFORDABILITY

Consumers’ demand for a home remains high, and analysts said rising mortgage rates may push some who have been sitting on the sidelines to jump into the game.

“Affordability at least currently is average in this period of time,” McCarthy said. “The rise in mortgage rates has encouraged some people to move into the market now.”

Mortgage applications to buy a home rose 2.6 percent in the week ended Sept. 21, rebounding from a near 11-month low in August, according to MBA data.

Prospective buyers are now pressing sellers to lower prices, McCarthy noted.

“They have moved their sights lower,” he said. “They are bargaining harder.”

Home prices in 20 major U.S. metro areas grew at 5.9 percent annual clip in July. They have slowed for a fourth straight month from a 6.8 percent pace in February, according to S&P/Case Shiller.

Source: Reuters

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