About two in three renters have not taken steps towards home ownership, a new survey shows, with the majority favoring renting instead of owning houses.
New data from the Kenya National Bureau of Statistics (KNBS) shows that Kenyans in rented houses are not saving to build or buy homes, reflecting the low uptake of mortgages.
“[That] 62.6 percent of tenants who wanted to own homes had not made plans towards home ownership. However, 11.2 per cent were saving to construct a house, while 10.7 per cent were saving to buy land,” said the statistics office.
Only 0.8 percent were taking a loan to buy a house.
“More than half (52.8 percent) of the houses were acquired through one-off construction, while 27 per cent were constructed incrementally. Only 2.5 per cent of the homes were purchased,” added KNBS.
The survey shows that Kenyans cited their reasons for renting as proximity to work and amenities.
Renting allows you to move freely from one location to another depending on job, business and lifestyle changes as compared to owning a house.
It offers lower upfront costs typically in smaller instalments such as first month’s rent and a set deposit fee.
Owning a house either through building or buying requires a significant upfront investment, including a down payment, closing costs, and other fees.
In other cases, it requires a long-term financial obligation in the event of a mortgage.
“Slightly more than half (52.2 percent) of the respondents preferred to rent because their dwellings were too far from work, while 41.3 percent preferred to rent because their dwellings were in rural areas,” added KNBS.
Data from the Centre for Affordable Housing Finance Africa shows that the price of the cheapest newly built house by a private developer in Kenya in 2023 was $7,111 (Sh921,585).
Underlying this limited affordability are high unemployment rates, unequal income distribution, high inflation rates, low household incomes and widespread poverty.
More than half of the renters preferred living in apartments or flats (56.3 percent) followed by bungalows at 20.8 percent and 11.5 percent in compound houses with separate facilities.
About a third of renters preferred a two-bedroom house (33.9 percent) and 31.4 percent a one-bedroom house.
“Nairobi City was the most preferred county at 17.1 percent followed by Kiambu and Nakuru at 8.6 percent and 6.6 percent, respectively,” added KNBS.