KMRC to Help Address Kenya’s Housing Deficit

The Kenya Mortgage Refinancing Company (KMRC), an initiative of the National Treasury and the World Bank, is expected to help address Kenya’s housing deficit by extending the range of qualifying mortgage borrowers which will, in turn, lead to the growth of homeownership rate and a vibrant mortgage market.

Through increasing of the amounts of monies available for mortgage lending and lengthening typical mortgage tenures in Kenya from the current average of 12 years to 20 years, KMRC will, according to Cytonn Investments, bring down monthly payments by 14 percent.

In February this year, Central Bank of Kenya (CBK) published draft regulations intended to provide a clear framework for licensing, capital adequacy, liquidity management, corporate governance, risk management and reporting requirements of mortgage refinance companies. Once approved, the regulations will guide the launch and beginning of operations of the KMRC.

KMRC’s main objective according to Cytonn’s report dubbed ‘Kenya Mortgage Refinancing Company Update’ is to grow Kenya’s mortgage market by providing long-term funding to primary mortgage lenders.

The initiative aims to support the affordable housing agenda by increasing the availability and affordability of housing finance, thus boosting home ownership.

The Kenyan mortgage market still lags behind, with a mortgage to GDP ratio of 3.1 percent in 2016, significantly lower than more mature markets like South Africa, and the United States of America.

To help bridge the funding gap in the housing finance market, there is a need for better systems encompassing alternative sources of long-term financing, improved land and property registration, an expansive credit bureau coverage, and an efficient legal system.

The Need for Housing Finance in Kenya

Affordability is a major constraint to the growth of the housing and mortgage markets, and a key challenge to accessing decent housing in Kenya.

According to the2015/16 Kenya Integrated Household Budget Survey (KIHBS), only 26.1 percent of Kenyans living in urban areas own the homes they live in, with the main factor causing this being the unaffordability of housing units in the market.

Those who own homes rely mainly on savings and other sources of financing including mortgage loans, commercial bank loans, local investment groups commonly referred to as chamas, and Savings & Credit Co-operative Societies (SACCOs).

Out of an adult population of about 23 million, there were only 26,187 mortgage loans as at December 2017, according to the CBC Bank Sector Annual Report 2017.

While the number of mortgage loans has been growing by an annual CAGR of 5.7 percent since 2013, the average mortgage size in Kenya has been growing at a higher CAGR of 9.6 percent, from 6.9 million shillings in 2013 to 10.9 million shillings in 2017.

Mortgage Refinancing Companies address the liquidity issue, by using the capital markets to raise large amounts of funds to support the lending activities of PMLs in a sustainable manner and increased liquidity also helps to reduce risk premiums on mortgages for borrowers.

Some of the capital market products that could be considered include Housing Bonds, Asset-Backed Securities, and Real Estate Investment Trusts (REITs), targeting both retail and institutional investors. Institutions such as pension funds and insurance firms offer a viable market for these securities, especially given their rapidly growing pool of long-term funds.

Insurance companies are also potential investors, holding 2.4 percent of their portfolios in loans and mortgages as at September 2018.

By Vera Shawiza

World Banks’ Green Building Certification and Benefits to Nigerian Investors

Investors in housing sector have been charged to introduce and implement a greener development path that ensures resource-efficient construction and practices.

According to experts, green construction offers a chance to secure emission cuts at a low cost and lock in energy and water savings for decades to come. Nigeria currently ranks as the 15th most vulnerable country to the effects of climate change in the world due to heavy dependence on fossil fuels for power generation leading to low life expectancy.

Buildings account for about 40per cent of energy use globally and 19per cent of greenhouse gas emissions. By 2050, the built environment is expected to double due to high population growth and urbanisation trends while most of the growth will occur in emerging markets, particularly in middle and low income countries in the Sub-Saharan African region like Nigeria, hence, the necessity for stakeholders in housing, to massively invest in green building projects.

Speaking on the benefits of green buildings at a one-day workshop organised by the International Finance Corporation (IFC), World Bank Group in partnership with Green Square Metre Global Investment Limited in Lagos, the founder/ Chief Executive Officer, Green Square Metre, Shaninomi Eribo explained that green construction incorporates design techniques, technologies, and materials that reduce dependence on fossil fuels and negative environmental impact.

He said such structure and application of its processes are environmentally responsible and resource-efficient throughout a building’s life cycle, from planning to design, construction, operation, maintenance, renovation, and demolition.

The workshop themed, “IFC Excellence in Design for Greater Efficiencies (EDGE) discovery”, explores some of the benefits of the EDGE software which include, its role as most economically viable path to building green, drives results by making the next generation of buildings more profitable while being environmentally friendly. It also empowers decision making by giving instant financial and environmental impacts of systems as well as solutions and also reduces operational costs.

Eribo said the potential for investment in green projects are huge, stressing that out of a total $29.4trillion climate investment potential up to year 2030 in emerging markets, there is a $24.7 trillion investment potential for green buildings alone representing a whopping 84per cent of the total climate investment opportunities.

“IFC Climate Investment Opportunities Report estimates the commercial investment potential in the construction of low-carbon buildings in Sub-Saharan Africa at nearly $153bn, with Nigeria’s climate smart investment potential at over $104bn from 2016–2030 in selected sectors. IFC itself has committed about $300 billion in green building investments over the same period. This includes green bonds and green mortgages and other blended finance instruments.

“Beyond residential developments, green building investment opportunities also extend into retail, hospitality, medical, office and education projects. Just like her counterparts in Columbia, Mexico, Turkey and Vietnam, there is a unique opportunity for Nigerian developers to innovate and demonstrate renewed global leadership in sustainable construction”, he said.

He noted that 70per cent of green buildings in Nigeria and other developing countries hasn’t been built despite its prospects for brand differentiation, lower building operating costs, global branding opportunities as certified projects are celebrated across all official EDGE digital media platforms and opportunity to be profiled for cheaper financing and investment from IFC.

Other opportunities, he said, IFC’s EDGE software and certification standard reduces transaction costs for accessing green finance and is ideally suited for raising finance through green bonds. EDGE already complies with standards such as the Green Bond Principles, recognition by international development partners including the United Nations, World Bank & IFC (and Climate Investors) for measurable reductions in resource use, mitigating the potential effects of climate change in Nigeria, and contributing to the achievement of the SDG’s/Sustainable Development as well as recognition for the active protection of human and environmental.

On his part, Ghana Green Building Programme Lead (IFC), Mr. Dennis Quansah said EDGE is a green building certification system for emerging markets offered by the International Finance Corporation, a member of the World Bank Group that focuses on private sector development.

He maintained that green designs in the building sector could save investors serious money through lower energy and water bills adding that investors are fast recognizing that greener buildings can provide multiple benefits such as saving operating costs by boosting efficiency.

The EDGE program, which engages financial institutions, developers, government regulators, and homeowners, is supported by software that can be used by anyone in the world to design a resource-efficient building in more than 130 countries.

“Green building guarantees efficient use of resources in homes and living in resource-efficient units. It significantly reduce energy and water bills among a population that often spends up to 20 percent of their income on utilities.

Fast, easy to use, and affordable, EDGE empowers builders to choose technical solutions that reduce environmental impacts while capturing capital costs and projected savings. It only takes a handful of measures to ensure better building performance, resulting in lower utility costs, extended equipment service life, and less pressure on natural resources”, he stated.

By Victor Gbonegun

Housing Ministry: State govts to discuss redevelopment of old housing

The Housing and Local Government Ministry (KPKT) will discuss with the state governments the re-development of housing, especially flats which are more than 30 years old.

Its minister Zuraida Kamaruddin said the requirement to check or re-develop old housing was included in the national housing policy.

This was after cracks found in the apartment structure reportedly became worse and the block seemed to be tilted to one side.

Zuraida was met after the closing ceremony of the Kampung Baru Village Community Management Council Empowerment Convention (MPKK) at the Putrajaya International Convention Centre here today.

In the same press conference, Zuraida who had just returned from a working visit with Prime Minister Tun Dr Mahathir Mohamad to China, said she was part of the visit to look for investments for affordable homes.

“While in China, I saw development in fishermen areas, ports and small industries in villages. I will look at similar developments in Malaysia where Chinese investors can come to Malaysia to invest in fishermen, port and villages which are unique,” she said.

The convention was the first to be held and was attended by 800 MPKK chairman and secretaries of Chinese villages throughout the country. — Bernama

Source: By Malaymail

Nigerians Await ‘Next Level’ Intervention in Housing Sector

Prior to his first term which began in 2015, President Muhammadu Buhari promised a lot, including promises of addressing Nigeria’s housing deficit of about 17 million head-on.

While there were some actions taken in that direction, not so much impact was made, unfortunately.

Buhari’s party, the All Progressive Congress (APC) ‎had said it will build one million houses per annum if elected into power.

The party said it will review the ‎Land Use Act and provide infrastructures to realise the plan of addressing Nigeria’s housing deficit.

The then APC National Publicity ‎Secretary, and now Minister of Communications, Alhaji Lai Mohammed stated at an inter-party debate organised by the Centre for Democracy and Development (CDD) and Open Society Initiative for West Africa (OSIWA) in 2015 titled, “The Challenges of Housing, Water and Power Supply in Nigeria: What is the Master Plan?” that “We will use the Land use Act to reform land in a manner that will encourage all states to computerise their lands.

“That’s why we said we will create a mortgage market that we can build one million houses per annum.”

He further stated then that PDP had committed 50 million Euro bond to finance the mortgage.

“We have also asked the relevant government ‎agencies, especially the Nigeria Mortgage Refinancing Company (NMRC) take active hold of the money.

“We have already partnered 18 states to provide affordable housing from rent to own approach,” he said.

But so far, not so much has been achieved in relation to the above stated promises.

Next Level: What Can Nigerians Expect?

During his campaign for re-election this year, the new mantra was ‘Next Level,’ a supposed promise to advance whatever policies there were to a more appreciable height.

This has set the tone for expectation about what ‘Next Level’ will mean for Nigeria’s housing sector, which is in need of several policy interventions, policy repeals and passages.

One of the counter productive decisions made by the government according to Housing Sector experts was the merging of ministries of works, power and housing.

These ministries are so significant that it will be impossible to achieve needed results unless they are untangled and administered by individual ministers.

As the President is planning to constitute a new ‘Next Level’ cabinet, the expectation is that it will reflect a better outlook for Housing. Will the president unbundle these ministries? Will there be a new approach to housing? These are the questions dominating the discussion among industry enthusiasts.

According to some Housing sector stakeholders who spoke with Housing News, the President owes a duty to Nigerians, especially the low income earners who voted for him.

The expectation for Next Level is that even those in informal sectors like carpentry, bricks making, farming, drivers and all sorts of artisans will be able to enjoy a housing policy that gives them opportunity to own their own homes.

“Next Level should bring a solution to our housing crisis, where those low income earners who voted President Buhari will have a house of their own they can afford,” said Frank Aba, a real estate investor.

Speaking further, he said that with the right approach, housing can be used to reduce poverty of citizens. “The quality of life will significantly improve for those who are able to benefit from a well thought housing program by the government. They should also widely consult with industry stakeholders on how to provide not only houses that are affordable but also of high standard,” he advised.

Other stakeholders also emphasis on the need for the amendment of the land use act, speedy work on the foreclosure bill, amendment of the NHF bill among others.

This has been suggested as actions that should be on the priority list of the 9th National Assembly.

To avoid mistakes of the past, housing industry experts harp on the need for wide sector consultations before final decisions are made with regard to these laws.

While the government has received some commendation for its efforts with regards to Family Homes Fund, Housing Loans etc, there is the unmistakable recognition of the fact that there is still a lot more to be done.

It is the hope of many that the government will match words with actions in order to realise the set housing objectives for Africa’s largest economy, in order to also attract more local and foreign investors.

By Ojonugbwa Felix Ugboja

Peterborough house prices decrease – bucking the national trend

House prices in Peterborough decreased by 1.7 per cent in February, despite witnessing a 0.6 per cent rise over the last 12 months.

It comes as annual price growth across the UK fell to its lowest level in six years.

The latest data from the Office of National Statistics shows that the average property in the area sold for £188,970 – significantly lower than the UK average of £226,234.

Across the East of England property prices have risen by 0.6 per cent in the last year, to £290,137. The region performed at the same level as the UK as a whole, which saw the average property value increase by 0.6 per cent.

The data comes from the House Price Index, which the ONS compiles using house sale information from the Land Registry, and the equivalent bodies in Scotland and Northern Ireland.

The average homeowner in Peterborough will have seen their property jump in value by around £47,000 in the last five years.

The figures also showed that buyers who made their first step onto the property ladder in Peterborough in February spent an average of £159,300 – around £38,000 more than it would have cost them five years ago.

Residential research analyst at estate agent Savills, Lawrence Bowles, said: “UK house price growth took a further hit last month, with just 0.6 per cent growth in the year to February 2019. That’s down from annual growth of 1.7 per cent last month and 4.4 per cent growth this time last year.

“However, average house prices are still 46 per cent higher than they were 10 years ago.

“This marks the second month of house prices falling in inflation-adjusted terms. CPI was 1.9 per cent in the year to February 2019, which means that house prices are 1.3 per cent lower than last year in real terms.

“Northern Ireland, Wales and the North West showed the strongest regional performance – affordability in these regions is less constrained than in higher value markets, so there’s more room for value growth.

“We’re forecasting the North West will show the strongest house price growth over the next five years.”

Between January and December last year, the most recent 12 months for which sales volume data is available, 3,169 homes were sold in Peterborough, six per cent fewer than in the previous year.

The highest house prices in the country in February were found in London’s Kensington and Chelsea, where properties sold for an average of £1.33 million – 16 times the cost of a home in Burnley, where the average property cost just £83,000

Source: By Joel Lamy

“An ever-growing housing crisis”

The home is at the centre of people’s lives. The condition and the affordability of housing has a massive knock-on effect on health (both mental and physical), children’s education, local economies and so much more. Yet in London and across the country we face an ever-growing housing crisis.

Solving the housing crisis will require strong leadership nationally, but we already know many of the solutions. They include: restoration of meaningful grant for a programme of mass social house building; changing the law to allow councils to buy up land more cheaply; reforms to private tenancies to give tenants security of tenure and to stop landlords hiking up rents.

Today we will hear from Labour in local government, regional government and in parliament about what is being done to tackle this crisis in spite of the Tories being in power nationally, and what we need from a future Labour government.

Karen Buck is the driving force behind the Homes (Fitness for Human Habitation) Act. Despite being blocked by the Tories on at least two occasions, her bill finally became law this year. It allows tenants to take legal action against landlords who do not ensure their properties are fit for human habitation. In her piece for LabourList today, the MP for Westminster North puts the current housing crisis into historical context and explains how her Act will empower tenants.

housing crisis

In London, there are 56,500 in temporary accommodation. Nearly 8,000 people sleep rough on our streets every year, and the London Assembly estimates that 13 times that number are “hidden homeless”. Cllr Farah Hussain, Labour’s housing chief in the London Borough of Redbridge, rightly argues that one of the Tories’ flagship pieces of homelessness legislation, the Homelessness Reduction Act, is meaningless if it is not properly resourced, and if the Tories continue their damaging welfare cuts and caps.

Hackney Council has won praise for the extraordinary quality of its new build council housing. Mayor Phil Glanville writes about how their house building programme is delivering modern, spacious and beautiful homes for social rentdespite a lack of support from central government.

While housing is most unaffordable in London, the housing crisis is very much a national issue. Cllr Linda Woodings from Nottingham City Council, which has built 523 new council homes over the last four years, sets out the challenges faced by councils that want to develop new council housing.

And finally, Sadiq Khan will set out in a piece later today what he’s doing to address the housing crisis in the capital. He estimates that we need four times the annual funding for genuinely affordable homes that central government currently provides. Under Sadiq, City Hall is directly funding councils to build new council homes for the first time.

This is just a small snapshot of what Labour is doing where we are in power. But we all know that to truly solve the housing crisis, we need a Labour government. A decent, affordable home ought to be a human right. Under Labour, it will be.

Source: By Tom Copley

City house price growth at 7 year low

According to the data, the slowdown in the capital has spiraled out into cities across southern England with price growth ranging from -0.6% in Oxford to +2.2% in Bristol. Slower price growth is a result of weaker buyer demand.

Zoopla found that housing sales in southern England are down 13% since 2015 – the peak year for sales – primarily a result of affordability pressures and higher stamp duty costs in this part of the country. Brexit uncertainty has been a compounding factor, meaning households have been delaying decisions over home purchases.

However, Northern cities continue to buck the trend and defy the slowdown seen across the rest of the country with stronger house price growth. Liverpool leads the way with average house prices up 5.7% annually to £122,100.

Leicester, Manchester and Glasgow are also registering house price growth in excess of 5% per annum. These cities have rising employment rates and attractive levels of affordability with prices rising off a lower base. Prices in Glasgow (7%) and Liverpool (4%) are still only just above the price levels recorded in 2008.

Liverpool and Glasgow have registered the highest increase in housing sales since 2015 of all the cities, with transactions up by 19% and 12% respectively. On average, property sales increased by 6% across all cities in northern England in the last three years (2015 to 2018).

Richard Donnell, Research and Insight Director at Zoopla, comments: “The housing cycle continues to unfold at different speeds across UK cities. London has led the overall market along with Cambridge and Oxford. While sales in London are down 20% on 2015 levels, prices are flat over the last 12 months. The signs of firmer pricing we recorded last month have continued into March with fewer London postcodes registering price falls. More realistic pricing and better value for money for potential buyers means sales volumes have stabilised.

Cities across southern England are 18-24 months behind London. House prices have increased significantly ahead of earnings in recent years causing the rate of price growth to now slow due to weaker demand and lower sales volumes. Price growth is set to remain weak as affordability levels start to re-align with what buyers are prepared to spend.

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. As employment levels and incomes rise, households have the confidence to bid up the cost of housing, with four cities registering price growth of 5% or more per annum.”

Source: By Warren Lewis

Fashola Outlines Housing Devt Impact on Job Creation

Minister of Power, Works and Housing, Babatunde Fashola,  has  advised Federal Housing Authority (FHA) Board to invest massively in housing development nationwide to further address the unemployment  challenge in the country.

Fashola, who spoke after receiving the FHA board’s annual report  in his office, urged the authority to replicate its ongoing 700 housing units in Abuja Mass Housing project in Zuba nationwide to engage 10,000 employees. He said if done in the 36 states of the federation and Abuja, it would create an ecosystem of opportunities for jobs and industrialisation.

He said through the project, the FHA has identified appropriately the critical role housing development could play in responding to and solving some of the problems and challenges facing the country.

Fashola  said: “If you go to a site where over 700 housing units are being built and 10,000 people are benefiting and getting employment there, you are really then beginning to attack the social issues of exclusion, unemployment, joblessness and restoring the dignity of the human being.

“If we can have 10,000 people employed in each of the 36 states and the FCT, clearly we will be pushing the needle in a significant way. With SMEs making paints, wires, roofing sheets and all of the building materials, we will really be creating opportunities for labourers who use them, transporters, food vendors and others.  It is a huge ecosystem of activities,” he said.

Pledging that his ministry would continue to compliment FHA’s efforts and what the Federal Mortgage Bank is doing to open up opportunities to allow for mortgage lending, the minister commended the  Board for coming up with a report of its activities within one year of its inauguration.

“I cannot recall ever reading that a board of the FHA in the recent past ever submitted an annual report after one year. I am highly impressed that within a year of the inauguration of this board, FHA is able to look back while it projects forward to say let us go and report to those who appointed us.  This is a  strong validation of the current administration stance on accountability. What gets measured and reported gets done,” he said.

In his remarks before submitting the report, which covers March 2018 to March 2019, the board chairman, Senator Lawal Shuaibu said the report was aimed at highlighting efforts the board has made in its first year in injecting new ideas and designing strategies for improving governance and service delivery in the agency.

By Okwy Iroegbu-Chikezie


Some London houses 25% below peak as transactions plummet – new index

It’s a new index but it tells an old story – how prime central London prices have dropped significantly since their peaks some years ago.

The new measure comes from buying agency Property Vision and it differs from the slew of other London indices by looking at price per square foot on actual sale prices.

It also stretches back to a 20 year archive of data.

The first release of it shows that house prices are now off their peak in 2014/15 by nearly 25 per cent and flats by 21.7 per cent. This now takes at values back to those last seen in 2012 and houses back to their level in 2010.

PV says that in the past year flats have declined more in percentage terms than have houses – 8.4 per cent against 6.2 per cent.

But the multi-year drop in house prices is what worries PV most, and the agency describes the fall as “precipitous” and leading all those involved in the prime property market – “interior designers, removal companies and estate agents to name a few” – being depressed,

It says that compared with 2013 transactions of houses in the £5m to £10m bracket are 50 per cent down; in the over-£10m category, the transaction collapse has been 70 per cent.

PV says some ill-advised buyers have snapped up “fancy looking flats bought off-plan when growth seemed limitless”, while more savvy international  buyers are waiting until now to act – taking advantage of Brexit torpor and reduced prices.

You can see two graphs from the new index below: the vertical axis in each is £psf.

Some London houses 25% below peak as transactions plummet - new index

Source: Estate Agent Today

How Micro Homes Can Solve Housing Crisis

Living in micro-homes could “expand choice” for young professionals and help tackle London’s housing crisis, a report has suggested.

A neoliberal think tank is calling for the Greater London Authority (GLA) to scrap its rules on minimum floor space.

The Adam Smith Institute said homes in the capital with less than 37 sq m of floor space could be an “affordable opportunity” for young people.

But the GLA said “cramming people in” was not the answer to the problem.

Micro-homes are defined by the British Property Federation as living spaces between 20 and 40 sq m, that are either self-contained or share some amenities.

The average size of a home in England and Wales is 90 sq m.

But the Adam Smith Institute claimed “size doesn’t matter, it’s how you use it”, and said the GLA’s minimum floor space requirement should be replaced with a minimum standard of living.

It also claimed more Londoners were “comfortable with living in smaller apartments”.

Micro-homes were “smart, modern, custom-designed units” which were “often accompanied by communal amenities such as games rooms and open living spaces”, the institute said.

In the study, author Vera Kichanova admitted micro-homes were “not for everyone” and “should not be a substitute for profound reform of housing regulation”.

But she added: “For many younger individuals smaller homes would provide the opportunity to live centrally: close to work, entertainment and other amenities.

“Local authorities must reverse their opposition to smaller units in order to provide Londoners with more housing choice at affordable levels.”

But Daisy Dunne, 24, who lives in a two-bedroom house in Stockwell with her boyfriend and another couple, said: “I don’t think I could live in a micro-home because I’d find the lack of space too oppressive.

“I’d much rather get around London’s high rent prices by living with friends, or with my boyfriend and another couple, like I’m doing now.”


The couple were previously renting a living room of a property which they shared with friends.

“We moved [out of the living room], in order to have more personal space and also to live just us two,” said Ms Seaborne.

“We are paying nearly double what we were paying before in rent, but I’d say it’s the average for many people.

“I’ve stayed somewhere minuscule before on holiday, and although it’s fine for a short while, I wouldn’t recommend it for anyone. I think it’s unhealthy to live on top of oneself like that, as a couple, it could drive you apart.”

London mayor Sadiq Khan has said London needs “more than 50,000 new homes a year” to combat a shortage of affordable housing.

However, he does not want people to lose out on space.

James Murray, the deputy mayor for housing, said: “The solution to London’s housing crisis is not to cram people into ever-smaller homes.

“We need to build more council, social-rented, and other genuinely affordable homes that are well-designed places to live.

“The mayor supports homes being built at higher densities, but this must not mean cutting back on space for individual homes.”

Source: BBC NEWS

Translate »