More incentives needed to raise home ownershipFriday February 03 2023
The move by the State-backed Kenya Mortgage Refinancing Company (KMRC) to double the size of subsidised home loans to Sh8 million hands more middle-income Kenyans an opportunity to own a house.
The high cost of construction materials and rising prices of new units have made it harder to own a home.
KMRC has raised the funding for the purchase of homes to Sh8 million in the city and Sh6 million in the rest of the country, meaning that mortgages, especially under the affordable home schemes or from the middle-class who have the leeway to mix funders, will increase.
The mortgage refinancing company says it will continue to adjust the regulations as the real estate environment evolves and one of the adjustments it should make is increasing the allocations to be in tandem with the average mortgage loan size of Sh9.2 million.
Raising the allocation to 105 percent of the value of the purchased home from 90 percent, therefore reducing the need for upfront payment, is also a step in the right direction.
Many prospective homebuyers and especially first-time buyers with limited incomes have missed out on mortgage plans because they lack deposit money, legal and valuation fees.
Doubling the size of subsidised loans is a good thing, it is hardly enough to achieve the critical mass of homeowners envisioned under the affordable housing agenda.
A majority of low- and middle-income class Kenyans need more incentives to be able to buy homes.