Plans for affordable mortgage welcomeMonday January 23 2023
The government's plan to reduce mortgage rates to as low as Sh10,000 a month is a step in the right direction.
Mortgages currently stand at a paltry 30,000, highlighting the high cost of buying homes under the arrangement. This has locked out many Kenyans, including employees with a steady income, from purchasing homes.
The government, under the affordable housing programme, seeks to deliver at least 250,000 houses annually. But it is the ability of Kenyans to buy the homes that will make the programme succeed.
The creation of the State-owned Kenya Mortgage Refinancing Company sought to boost the uptake of mortgages through affordable long-term financing. However, its impact is yet to be felt.
The plans to restructure the home financing schemes should consider developing friendly funding options to attract prospective buyers, especially low-income earners.
Tenant purchase schemes should also be implemented to give Kenyans a wide range of choices for home ownership.
Well-thought-out financing is the key to the success of affordable housing initiatives. Costly mortgages will make home ownership a preserve of the rich.