Stakeholders have called for an overhaul of the country’s mortgage system to bridge the housing affordability gap.
The call was made during a media interactive session organised by the Property and Environment Writers Association of Nigeria, in Lagos recently.
The Managing Director of Legrande Properties Development Company Ltd, Jide Durojaye, said that the government should make provision for adequate financing plans for developers at an affordable rate to enable them to provide affordable housing.
“The government should instruct banks to provide a mortgage system that would make way for an easy payment system.
“Also, once a developer wants to build and the bank can certify that the developer has a good document, the bank can then go ahead to finance the developer to produce houses at a very good rate.
“And once the developer is building, he or she would be introducing all the off-takers to the bank, and once the project is completed, the bank can then pay the developer off, it then becomes the property of the bank.
“Pursuant to this, the bank can then distribute the off-takers or subscribers who would then be making payments on a monthly basis in the capacity of their salary.”
Durojaiye also urged all tiers of government to collaborate with the private sector and increase housing investments.
According to him, Nigeria has an estimated housing deficit of 28 million, indicating the need for the same number of units to cater to the population.
“If this collaboration is not made now, you will find out that by 2027, rent may skyrocket to N7 million. The low-income group should not be allowed to be pushed out of Lagos, hence the need for governments to collaborate with the private sector to provide affordable units.
“The government needs to quickly intervene in the rising cost of building materials in the country as well as address other factors affecting affordable housing delivery.
“However, Legrande Properties Development Company is in partnership with both federal and Lagos State governments.”
Also speaking, a mortgage banker, Bukola Jegede, faulted the country’s mortgage system, describing it as nonexistent.
“The interest rate on any mortgage is double-digit, and it is around 28–30 per cent. It is only a ritualist or a fraudster that can take a mortgage with that kind of high interest.
“The institution here is not like we have it abroad, where they get a single-digit interest rate.
“It is true that the Federal Government-owned mortgage institutions charge six per cent interest. For other mortgages, you cannot get anything less than 18 per cent, which does not allow the mortgage system to thrive.
“Also, most mortgage institutions do not do long-term lending. They only do five years maximum because they want their money back as fast as possible because the longer loans are with Nigerians, the more difficult it would be to get them back.”
