House Prices in Southern England Have Fallen by 13% in the Past 3 years

Property sales across cities in southern England have fallen by 13% on average since 2015, according to new figures.

A new Zoopla index, which looks at the UK’s 20 biggest cities, found homes have fallen by 13% in the South between the full calendar years of 2015 and 2018. On average, sales increased by 6% across cities in northern England over the three years. Sales in London and Cambridge are down 20% on 2015 levels.

By contrast, transactions in Liverpool have increased by 19% over the same period and those in Newcastle have increased by 5%.

As well as a big jump in sales, Liverpool also had the strongest annual house price growth in March among the 20 cities in the index, with a 5.7% year-on-year price increase taking the average property value there to £122,100.

Leicester, Manchester and Glasgow also recorded house price growth of 5% or slightly more in March.

Richard Donnell, research and insight director at Zoopla, said: “House prices and sales volumes continue to increase in regional cities outside southern England.
“Prices in these cities have recorded modest gains over the course of the last decade and affordability remains attractive.”
By Vicky Shaw

Buhari declines assent to National Housing Fund Bill and 4 others

In separate letters addressed to the Senate President, Dr Bukola Saraki, sighted by Vanguard yesterday, which will be read when Senate resumes plenary next week, Buhari listed the latest rejected bills as National Institute of Credit Administration Bill, 2018;

Small and Medium Enterprises Development Agency Bill, 2018; Ajaokuta Steel Company Completion Fund Bill, 2018; National Housing Fund Bill, 2018 and Federal Mortgage Bank of Nigeria Bill, 2018.

With this latest development, the number of passed bills in the current 8th Senate and refused to be signed into law by the President is now put it at 31. Buhari had on March 20, declined assent to five bills passed by the National Assembly and forwarded to him to sign into law.

In separate letters addressed to the Senate President, Bukola Saraki and read at Plenary, President Buhari listed the latest rejected Bills as Nigerian Film Corporation Bill, Immigration (Amendment) Bill, Climate Change Bill, Chattered Institute of Pension Practitioners Bill as well as Digital Rights and Freedom Bill.

Other bills earlier rejected by Buhari since 2015 include: the Petroleum Industry Governance Bill (PIGB), Stamp Duties (Amendment) Bill, Electoral Act (Amendment) Bill, Industrial Development (Income Tax Relief) (Amendment) Bill, National Research and Innovation Council (Est.) Bill, National Institute of Hospitality and Tourism (Est.) Bill and National Agricultural Seeds Council Bill.

Others are Chattered Institute of Entrepreneurship (Est.) Bill, Advance Fee Fraud and Other Related Offences (Amendment) Bill, Subsidiary Legislation (Legislative Scrutiny) Bill, Nigerian Maritime Administration and Safety Agency (Amendment) Bill as well as five constitution amendment bills.

Also rejected are: National Transport Commission Bill, Federal Road Authority (Establishment) Bill, National Broadcasting Commission Amendment Bill, National Oil Spill Detection and Response Agency (NOSDRA) Act (Amendment) Bill and Federal Polytechnics Act (Amendment) Bill.

Source: By Henry Umoru

Dramatic housing transformation in sub-Saharan Africa revealed for first time

Using state-of-the-art mapping, the study, led by the London School of Hygiene & Tropical Medicine, Imperial College London and Malaria Atlas Project, University of Oxford, is the first accurate estimate of urban and rural housing quality in sub-Saharan Africa. While highlighting the positive transformation in the region, the prevalence of improved housing doubling from 11% in 2000 to 23% in 2015, the study also estimates that 53 million urban Africans (in the countries analysed) still lived in slum conditions in 2015.

Adequate housing is integral to many associated health outcomes including mental health, respiratory disease, diarrheal disease, and vector borne diseases, such as malaria. Addressing the housing needs of a growing population is therefore key to sustainable urban development and the health and wellbeing of millions of Africans.

The researchers say these new data will be vital to guide interventions to achieve the United Nations Sustainable Development Goal (SDG) 11 which aims for universal access to adequate, safe and affordable housing and to upgrade slums by 2030.

Lead author Dr Lucy Tusting, from the London School of Hygiene & Tropical Medicine who conducted the work while at the Malaria Atlas Project, University of Oxford, said: “Adequate housing is a human right. The housing need is particularly urgent in Africa where the population is predicted to more than double by 2050. Remarkable development is occurring across the continent but until now this trend this had not been measured on a large scale.

“These results are a crucial step to reaching sustainable development goals as quickly as possible, and show that African housing is transforming, with huge potential to improve human health and wellbeing.”

To produce these new estimates, the researchers combined data from 661,945 households from 31 countries into a model using an innovative technique that allowed the prevalence of different house types to be mapped across the African continent.

Housing was categorised using the United Nations description, where houses with improved water and sanitation, sufficient living area and durable construction were considered to be improved. Housing lacking any one of these features was considered to be unimproved.

The prevalence of improved housing was highest in countries including Botswana, Gabon and Zimbabwe, and lower in countries such as South Sudan.

The researchers also found that the housing transition may be linked to economic development. Improved housing was 80% more likely among more educated households and twice as likely in the wealthiest households, compared to the least educated and poorest families.

Senior author Dr Samir Bhatt from the MRC Centre for Global Infectious Disease Analysis at Imperial College London said: “These findings highlight that poor sanitation remains commonplace across much of sub-Saharan Africa, which may be holding back progress to improve living conditions. Our study demonstrates that people are widely investing in their homes, but there is also an urgent need for governments to help improve water and sanitation infrastructure.”

Dr Fredros Okumu, Director of Science at Ifakara Health Institute in Tanzania, and a co-author of the paper said: “The changes that we have observed are incredibly significant, especially since households mostly paid for these improvements with their own incomes and no external financing.

“From a public health perspective, this trend presents a massive opportunity for African governments to accelerate ongoing efforts against vector-borne diseases such as malaria, and to secure such gains for the long-term.”

The authors acknowledge limitations of their study including the difficulty of using a single definition to capture the full range of housing conditions across sub-Saharan Africa. The study also relied on national surveys which may not be directly comparable due to variation in their methods and data collection procedures, and which represent a limited sample of African households.

Source: ScienceDaily

Insurance as buffer to Refin Homes affordable housing for middle-class income earners

A strong partnership with insurance companies to protect consumers in the area of repayment default, loss of employment and death will be a buffer to Refin Home’s quest to provide affordable housing to middle class income earners across the country.

Refin Homes Limited, a relatively new player in the real estate market has come with a unique model that target to provide affordable housing to everyone in such a flexible manner that will not only guarantee quality, but also provide opportunity irrespective of your income level.

The company was established with the aim of bridging the housing gap in Nigeria. “Our key focus is providing affordable housing for middle-class income earners without compromising quality because we are the community builders, set to establish, develop, strengthen and increase economic activities within identified localities, promoters of the company said.

With over 41 years experience, drawn from across banking, mortgage and housing development, the key actors have seen the gap in the market and are committed to lifting the housing sector.

At a stakeholders interactive session with the theme ‘Creating the Future’ organised by Refin Homes held in Lagos, experts in the sector called for collaboration between government and private sector to bridge the country’s housing gap.

Olatunde Macaulay, managing director of the company said Refin Homes came into the real estate market to focus on providing alternative housing solutions that add value to lives, especially the under-served middle to lower end spectrum.

He said, “For over 10 years, a 17 million housing deficit has been bandied around. The government cannot handle this deficit alone. There has to be a public/private partnership and other private institutions such as ours, must help the government in reducing this huge housing deficit as soon as possible” he added.

He said the theme, “Create The Future” is a strategic platform that calls the attention of all Nigerians on the need to plan ahead today by putting in place modalities that ensure a solid roof over their heads. “The future is not somewhere distant, the future is now, and we want to sit with Nigerians to plan based on your desires and capacity to give you the home of your dreams” Macaulay added.

Kazeem Owolabi, the COO and co-founder of the firm also speaking at the event, advocated for efforts to be directed more at providing affordable housing for the middle and lower classes of the society.

He said it was unacceptable that Nigerians work so hard and yet, many of them cannot even think of owning their own homes.

Owolabi believes that in the long term, the Nigerian economy becomes the biggest beneficiary of a system that makes it easy for people to own quality and affordable homes.

What lower US rates means for property

The US Federal Reserve’s decision to scrap interest rates hikes this year gives the Reserve Bank of Australia more scope to cut rates – and in doing so ease any transition to Labor’s negative gearing and capital gains tax changes, SQM Research managing director Louis Christopher said.

The US central bank’s decision on Wednesday to hold rates steady after it lowered its forecast for the world’s biggest economy made it more likely the RBA would make the 50 basis point-cut that many economists expect, which would reduce borrowing costs and boost demand for residential property, Mr Christopher said.

In a report modelling impacts of Labor’s planned property tax changes that prompted Treasurer Josh Frydenberg and shadow treasurer Chris Bowen to trade blows on Thursday, Mr Christopher said lower rates would reduce the hit to housing prices and also the upwards push on rents that would come from Labor’s plan to limit negative gearing to new property and to halve the capital gains tax deduction to 25 per cent.

Source: The Australian Financial Review

Time for the housing market to spring forward

 Housing may be on the mend: Home sales dipped in January, leading to concerns about the health of the broader economy.

But with the Federal Reserve likely to keep interest rates on hold for the foreseeable future, there are hopes that the housing market will start to rebound.
On Monday, the National Association of Home Builders will release its latest monthly survey of builders. Confidence rose in February thanks to a dip in mortgage rates, which have dropped along with long-term bond yields this year.
Mortgage rates have fallen even further lately thanks to the Fed, as well as concerns about China’s economy and the latest Brexit drama. The 30-year fixed rate mortgage hit 4.31% last week, the lowest level in more than a year.
“The housing market is benefiting from stock market volatility,” said Odeta Kushi, deputy chief economist with First American. “We have a ton of pent-up demand from older Millennials sitting on the sidelines waiting to be homeowners.
Lower rates should push up home sales.”
Kushi said the latest jobs report bodes well for housing, too. Even though the number of jobs added was disappointing, wages continued to rise.
And that could help people trying to save money, so they can go from living at home or renting to buying a house.
She pointed to a recent increase in home construction and housing completions as another good sign.
Supply is ampler than it had been.
“The housing market remains poised for a strong spring,” said Joel Kan, associate vice president of economic and industry forecasting for the Mortgage Bankers Association, writing in its most recent report on mortgage applications. Loan application volume rose 2.3% earlier this month.
“We are starting to see signs of more new residential construction and inventory, which increases buying opportunities for the many home shoppers who have been hampered by the ongoing lack of supply,” Kan added.
The latest MBA figures on mortgage applications will be released Wednesday.
All this could lead to a turnaround in existing home sales figures for February, which will be released by the National Association of Realtors on Friday. Sales fell 1.2% from December to January. But Kushi thinks they rebounded last month.
That should be good news for housing-related stocks too, which have already enjoyed a solid start to 2019 on hopes that the market is poised for a big comeback.
The SPDR S&P Homebuilders ETF (XHB) — which includes big builders like Lennar and Toll Brothers, as well as housing-related companies such as Roomba vacuum maker iRobot (IRBT) and appliance giant Whirlpool (WHR) — is up 17% this year.
Retailer Williams-Sonoma (WSM), which is also a member of the builder ETF, will report earnings Wednesday. Wall Street expects sales to rise 7% and profits to jump 17%.
2. Fed’s balance sheet shrinkage: The US central bank will make its latest rate decision on Wednesday at 2 pm ET, and chair Jerome Powell will speak at 2:30 pm.
No rate hike is expected, so the hot topic will be whether the Fed will hint about changes to its so-called quantitative tightening policy.
In 2017, the Fed decided the US economy was healthy enough for the central bank to start selling off assets that it gobbled up to stimulate recovery after the Great Recession.
Critics say the Fed’s decision to shrink its balance sheet has contributed to economic turbulence. The Federal Reserve has signaled it may stop or slow the offloading of $4 trillion worth of assets, which has investors excited.
3. FedEx and the economy: The company has already warned that global issues, including trade disputes and economic slowdowns, could deliver a huge blow to its bottom line this year.
FedEx (FDX) slashed its profit outlook by 7% to 10%, with the deepest cuts coming to its international business.
The firm will post a quarterly earnings update on Tuesday after the markets close. And given macroeconomic issues are still a big concern, investors will be on the lookout for how it’s impacting one of the world’s largest courier companies.
4. Nike’s Zion problem: It was the rip heard around the world when Duke basketball star Zion Williamson injured his knee after his Nike (NKE) sneaker broke during a matchup with top rival North Carolina last month.  It caused the company’s stock to dip.
Nike said it was an “isolated occurrence”, but with March Madness starting this week, another wardrobe malfunction is the last thing Nike needs.
Nevertheless, Wall Street is expecting good news from Nike when it posts earnings after the bell on Thursday. Sales are expected to rise nearly 7%.
But investors will be paying attention to anything the company says about demand in China and Europe, given the recent signs of softness in those economies.
Source: CNN Business

Nigeria signs US $10m housing construction deal

Nigeria has signed a US $10m deal with United Kingdom-based Iconic City Limited for the  development of a 3.8ha land in Alakia, Ibadan, the Oyo State capital, into a residential housing estate.Group Managing Director and Chief Executive Officer, of Odu’a Investment Company Limited, Mr. Adewale Raji who signed the deal with the UK firm said the agreement aims at curbing housing deficit in the country.

“The housing deficit in the country is over 22 million. Investment in housing remains an important and profitable venture, especially when affordability is considered,”said Mr. Adewale Raji.

“The initiative was hinged on the Federal Government’s Economic Recovery and Growth Plan which had human capital development as one of its cardinal objectives with housing provision as key factor in achieving that goal,” he added.

Westlink Iconic Estate

The proposed residential housing estate dubbed “Westlink Iconic Estate” will be a medium density luxury estate consisting 124 households. The housing products are 60 units of three-bedroom apartments, 42 units of four-bedroom terrace houses, 14 units of five-bedroom semi-detached duplexes, eight units of six-bedroom fully detached duplexes and 36 commercial and business units.

Mr Adewale Raji affirmed that housing types will vary to allow for different market segmentation subscribers. Construction of the project is scheduled for completion in 2years.

Mr Adewale Raji also quoted that the partnership was going to give his firm the opportunity to utilize its professional experience ranging from training, working to build a world class mixed luxury residential estate in Ibadan.

Source: Constructionreviewonline

Australian housing market on track for biggest downturn since GFC

Australia’s housing market is on track to experience a slump bigger than both the global financial crisis and the 1980s recession.

National dwelling (houses and units) values slumped by 6.8 per cent since their peak in October 2017, driven mainly by sharp falls in Sydney (-13.2 per cent) and Melbourne (-9.6 per cent), according to new analysis by property data company CoreLogic.

If prices continue to fall at current rates, within one month this downturn will be the largest since 1982/83 when Australia – along with most of the developed world – was in the grip of a crippling recession.

Some downturns are big, and some are small,” said Geoff White, head of real estate at CoreLogic.

“Usually, it’s driven by economic conditions, but in this case it’s more about credit.

We’ve come off a brilliant period where we’ve seen strong growth – but the key is when things go up quite radically, they can go down quite radically. In many cases the growth over the last five years has been unstable and we’re seeing a reaction to that now.”

A key trigger for the downturn is that lending standards have tightened and banks are more cautious to provide credit to prospective home buyers, particularly investors.

Graph showing the housing market downturns The Australian housing market is on track to experience its biggest slump in decades. Source: CoreLogic

 

During the GFC, banks were still prepared to approve loans, as the federal government’s bank guarantee – where the government underwrote the banks to boost confidence – kept credit flowing, while the first homebuyer grant stoked demand.

The tightening of lending standards – especially to property investors – coupled with increased stamp duty for foreign investors, have combined to cause the sharp market decline.

While the current downturn is dramatic, house prices over the longer term still show a positive trend – over the last 20 years the median house price has seen a 275 per cent increase, according to CoreLogic data.

“We’ve had a GFC, we’ve had recessions and yet we’ve still seen the market rise,” Mr White said. “It will always dip and dive, and it depends on the severity.

“This time the economy, across Australia in most major centres, has been performing well. Unemployment is low, inflation is low, interest rates aren’t high. There are great periods of growth and there will be falls.”

Confidence is key

But one commentator argues that economic conditions this time around should make homeowners feel more confident than they may have been during the GFC and the ’80s recession.

Not only is the economy strong enough to weather the storm, but Deloitte partner Nicki Hutley told The New Daily their analysis shows that wages are going up “albeit slowly” and people are still spending.

“When people say it’s the biggest downturn, it was preceded by the biggest upturn.

“In Sydney, for instance, we had houses going up 75 per cent, so for the bulk of people who brought in last five years they’re still ahead of the game,” she said.

Ms Hutley stresses that the drop-off in investor lending is nowhere near the extent of what happened around the GFC and that “things are going in our favour”.

“The biggest risk to Australia is not internal but external – China is the biggest risk at the moment, but even there the government is acting to bolster the economy through fiscal stimulus.

“I’m far less worried about internal [circumstances]. We’ve got good employment rates, there’s income growth, it’s slow but it’s growing and that helps consumption. Thing are going in our favour.”

Source: New Daily

Buyers finally get the upper hand in hottest U.S. housing markets

The real estate frenzies in West Coast cities have become the stuff of lore: buyers jostling at open houses, homes getting offers sight unseen, bids coming in hundreds of thousands of dollars over asking.

That’s all over now.

Just ask Kelly Randall, an Amazon employee who listed her renovated Seattle condo for $539,000 — a bargain compared with the $615,000 her friend got last year for a smaller place in the same building. Almost four months and four price cuts later, Randall’s still waiting for an offer.

“My timing sucks,” she said. “It’s a little frustrating.”

For the first time in years, the U.S. is entering its key spring house-hunting season with buyers holding the upper hand. Nowhere is the shift more pronounced than in once-hot areas such as Seattle, San Francisco and Denver, where bidding wars are vanishing, time-on-market is climbing and prices are flattening, or even falling. These western cities, the center of the recent housing boom, are now leading the slowdown.

The reasons are varied, from last year’s spike in mortgage rates to volatility in technology stocks. But the simplest explanation is that years of soaring values have put housing in many areas out of reach to all but the most affluent buyers. In many parts of the West, home prices have more than doubled from the recession while incomes have climbed far less.

“There’s a huge disparity,” said Lawrence Yun, chief economist of the National Association of Realtors. “People can’t catch up.”

With prices slipping and more inventory coming up for the busiest time for home selling, buyers who have the means will have a new opportunity to enter the market. Sellers, meanwhile, face a “reality check,” Yun said.

“This is what it looks like when the pendulum starts to go the other way,” said Felipe Chacon, a housing economist at Trulia.

Seattle is a prime example of the reversal. The area’s median single-family home price doubled since 2012 to $560,000, fueled by an Amazon-led tech boom that brought in a flood of highly paid workers. Houses regularly sold within a week, sometimes garnering 10 or more offers, with buyers waiving home inspections and financing contingencies.

Now, the tables are turning. The median single-family home prices in King County, which includes Seattle, fell 3 percent on a price-per-square foot basis in January, the first annual decline since 2012, according to brokerage Redfin. Roughly a sixth of the metro area’s listings had price cuts in the 12 months through January, twice the previous year’s rate, Trulia data show.

It may just be a brief respite after years of mania. Seattle’s economy and hiring remain strong, and housing is still tight compared with other parts of the country. Home sales have started to pick up from a tepid fall and winter, real estate agents say.

But there’s no question the house hunt has become easier for people such as Hector Perez, who moved to Seattle last year for an Amazon job and had heard horror stories about the crazy market. The Texas transplant and his wife, Kate, were pleasantly surprised when they zeroed in on a new home in the Queen Anne neighborhood that had been on the market for more than half a year.

Already, about $160,000 had been knocked off of the initial list price of almost $1.4 million. When the seller asked if they could do an inspection in five days, the couple said they were traveling and threatened to walk if they couldn’t get 10.

“It was a bit of a risk, but they came back and said, ‘OK,”‘ Perez said. “We had a little bit of leverage that we didn’t think we’d have.”

The invisible hand of Amazon may once again be playing a role in the market. There are concerns that the company, which occupies about a fifth of Seattle’s prime office space, may be slowing its growth in the city. Last month, the tech giant said it doesn’t plan to move into the space it leased in a new 37-story tower being built downtown. Amazon, which still has thousands of positions open in the city, declined to comment.

The broad cooling indicates that there are greater forces at play than a single company or industry. Home sales in January were at 11-year lows in both Southern California and the San Francisco Bay area, CoreLogic Inc. reported. Prices in both the Portland, Oregon, and Denver areas fell this year for the first time since 2012, according to local multiple listings services.

In the Bay Area, San Francisco’s market may get a boost as the pending initial public offerings of Lyft Inc., Uber Technologies Inc. and Pinterest Inc. mint millionaires, according to Patrick Carlisle, chief market analyst in the region for the brokerage Compass. But in Silicon Valley, there’s been a dramatic slowdown, he said. Santa Clara County — home of Google and Apple Inc. — saw its median house price fall 1 percent in the fourth quarter to $1.25 million, after a 27 percent surge a year earlier.

“Santa Clara was unbelievably hot,” Carlisle said. “But there has been a reaction to the high prices. When you add in last year’s rise in interest rates and the fact that their stock portfolio dropped, suddenly it made people a lot more cautious.”

Caution was apparent on a recent sunny Saturday morning in Northwest Seattle’s Whittier Heights neighborhood as Ruslan Polyak propped up an open house sign by the front door of a yellow townhouse. Recognizing the market’s slowdown, he had listed it last month for $810,000, even though an identical unit sold last spring for $835,000, almost $100,000 above asking, he said.

Negotiations are welcome, he told a buyer attending the open house: “My client’s super reasonable.”

Later that day, Polyak cut the price to $787,000.

Randall, the Amazon employee, is waiting for her condo to sell so she can buy a new town home she signed a contract to purchase in November. In a sign of the market’s softness, the builder is working with her, reducing the agreed-upon price as she’s had to lower her own asking price. It’s now $480,000, a $59,000 reduction from the original listing.

Her agent, Bill Jones with Every Door Real Estate, said the changing market isn’t all bad: “I don’t mind not having to compete with 12 other people to win a client a house.”

Source: SALTLAKETRIBUNE

New housing bill threatens Nigeria’s financial sector, economy

Ten percent of the profit before tax of Nigerian banks, insurance companies and pension fund administrators could go into a National Housing Fund promoted by lawmakers, according to an exclusive document seen by BusinessDay.

The so-called National Housing Fund (Establishment) Act, 2018 was secretly passed by the Senate on November 6, 2018, following its passage by the House of Representatives on July 17, 2018.

An approval by the presidency is all that stands in the way of the secret Act, which managed to elude private sector lobby groups, from becoming law, after it quietly made it through the National Assembly in 2018.

“When you put such a financial strain on private companies, they are forced to cut costs by sacking staff and freezing new investments,” a senior business person who did not want to be named said.

“This regulation will be poorly timed as it is happening when other countries are lowering corporate tax rates to incentivise investments,” the person said.

The levy will probably see some of the companies pass on the cost to consumers, thereby triggering a surge in inflation.

A race to cut spiralling operation costs created by the new levy could also force companies to lay off staff while barricading new investments in the economy.

That would be a tough blow to take on an economy still recovering from a contraction in 2016.

“Buhari has a chance to be the hero here if he refuses to assent to the Bill, but given his welfarist ideology, that may not happen,” a company CEO said on condition of anonymity.

The Act repeals the National Housing Fund Act Cap. N45, Laws of the Federal Republic of Nigeria, 2004 to provide for additional sources of funding for effective financing of housing development in Nigeria and was sponsored by Ahmad Kaita (APC, Katsina North).

The Act provides among others for every commercial or merchant bank, insurance company, and Pension Fund Administrator (PFA) to invest 10 percent of its profit before tax (PBT) into the Fund at an interest rate of 1 percent above the interest rate payable on current accounts of banks.

The Fund will also forcibly collect contributions from Nigerians, both in the public and private sectors, manufacturers and importers.

The Federal Government is to contribute to the Fund at its discretion.

Employees and self-employed Nigerians, who earn above the minimum wage, must contribute 2.5 percent of their monthly salaries to the Fund. Manufacturers and importers are also to contribute 2.5 percent to the Fund.

There’s also a levy on locally-produced and imported cement, which will be 2.5 percent ex-factory price before transportation cost for each bag of 50 kilogramme or its equivalent in bulk.

In the end, this levy may not be restricted to cement alone, as the Act provides that the President, by an executive order, could add, delete, amend or substitute consumer goods, services or products and approve rates for the levy as and when he thinks fit in the circumstance.

The Federal Mortgage Bank will manage the pooled funds, Section 15 (1) of the Act provides.
“The proceeds from the fund will be used to finance the housing sector of the economy through wholesale mortgage lending to primary mortgage banks,” section 15 (2) of the Act reads.

The failings of the former National Housing Fund and the track record of similar funds managed by government cast a cloud over how efficiently the new Fund will be managed and the chances that it achieves the primary objective for which it was created.

Industry players, who are worried that the provisions of the Bill overrule carefully-crafted regulatory guidelines that guarantee the safety of depositors’ funds sitting in the banks and pension funds, were critical of the Act and warned it would have dire consequences on the economy and investor confidence.

Boniface Okezie, national coordinator, Progressive Shareholders Association of Nigeria (PSAN), calls the Act a “fraud”.

“How can we be talking about extorting companies to fund something without seeking their consent,” Okezie said.

“This is unacceptable. Companies should not comply; rather they should rely on the provision of the Companies and Allied Matters Act (CAMA),” Okezie added. There are severe punishments for defaulters.

In the event that a company fails to pay the levy 60 days after it was due, it warrants a demand notice to be accompanied by a penalty of an additional 2 percent levy on the 10 percent that should have been paid.

If payment drags for another 60 days after the demand notice, the company pays a flat rate of N100 million and the CEO of the company risks spending three years in jail in addition to a personal fine, separate from the company fine, of N10 million.

In the case of importers, a two-month delay is all that is required before the importer is slammed with a N100 million fine, which the Bill says is the minimum.

A fine of N10 million could be slapped on individuals who fail to make their contributions as and when due.

The banks are expected to pay the levy to the Central Bank while the insurance companies and pension funds will pay to the National Insurance Commission and National Pension Commission, respectively.

For manufacturers and importers, the levy will be collected by the tax authority, the Federal Inland Revenue Service.

Sources say some private sector interest groups are planning to engage the Presidency with a view to stopping the implementation of the Bill which, they say, is inimical to the private sector and the economy at large.

The equities market would be directly affected if this Bill becomes law as investors worried about the impact the levy could have on company profitability may dump stocks at a frantic pace.

The document obtained by BusinessDay was signed February 19 by Mohammed Ataba Sani-Omolori, a clerk at the National Assembly.
Shareholders of companies, particularly the banks, insurance companies and PFAs, have kicked back.

Issues ranging from accountability to accessibility were raised and they advised their companies’ Boards of Directors not to approve any form of contribution into the Fund.

“The Act does not make sense because the contributors won’t have control over the Fund. Why do we scare investors? I don’t think it is good idea as it will scare away investors, so it must be jettisoned,” Sunny Nwosu, national coordinator emeritus, Independent Shareholders Association of Nigeria (ISAN), told BusinessDay on phone.

Moses Igbrude, publicity secretary, ISAN, said, “You can’t make companies to contribute to the NHF without letting them have access to it. President Buhari should not sign it.

The shareholders own the companies and we need to ask the companies whether they were represented at the public hearing on the Bill before its passage at the National Assembly.

If they were represented, they will need to explain to shareholders the benefits and who manages the funds.”

Attempts to reach the chairman, Senate Committee on Housing and Urban Development, Barnabas Gemade (APC, Benue), proved abortive as he did not pick his calls.

However, a member of the committee, Matthew Uroghide (PDP, Edo), told BusinessDay on Tuesday that he would check on the Bill before commenting on it.

“When I am in the office, I will go through the Bill before commenting on it. I will be in the office by next week,” he said in a telephone interview.

Source: BusinessDayNg

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