Mortgage financier HF Group #ticker:HFCK has welcomed talks to review interest rates capping laws which hurt its commercial property products.
HF Group managing director Frank Ireri said appetite for long-term mortgage was low due to the laws, coupled with last year’s slump in the economy which hurt Kenyans’ ability to buy property.
The company saw its net profit, loans and net interest income fall by 81, 17 and 30 per cent respectively in the third quarter of last year compared to the same period the previous year.
“Our customers who take up loans to develop property for sale are unable to sell as fast as they should. Construction, sales and conveyance risks have slowed down sales leading to slow loan repayments. We are still lending but have tightened repayment rules,” Mr Ireri said.
The MD said that delay in the issuance of title deeds due to ongoing reforms at the Lands ministry should be looked into to generate interest among house buyers.
The delay has also disrupted projects implemented since processing of sub-leases takes longer. Mr Ireri said their intensified campaign to grow funded schemes mortgages had attracted 70 companies whose employees accessed low-interest mortgages.
He said 8,000 housing units will soon be launched within Nairobi metropolitan area. They will be priced at below Sh4 million each thereby promoting home ownership for more Kenyans.
“Our joint venture housing projects at Kamiti, Clay City and Precious Garden Riruta are doing very well while our Komarock Heights development is nearing completion. Twenty five units at the 5,000 units Clay City property have been bought off-plan,” he said.