Market News

High fees, titling process hinder mortgage uptake

The high cost of land was cited as one of the reasons most Kenyans don’t buy homes. FILE PHOTO | NMG 

Difficulties in acquiring land title deeds and the high cost of legal and survey services are among the top four hurdles to mortgage lending growth in Kenya, a new survey shows.

The survey conducted by the Central Bank of Kenya (CBK) at the end of last year showed that fees charged by parties other than banks, apart from high house and land prices, discourage many Kenyans from buying homes.

The CBK said that house prices were cited by 30 per cent of the banks interviewed, while the high cost of land was cited by 27 per cent, incidental costs such as legal, survey and stamp duty were mentioned by 26 per cent and titling difficulties by 26 per cent as well.

Those interviewed typically mentioned more than one factor, but some factors were mentioned by more often than others.


“Based on the ranking of mortgage market constraints, banks identified the high cost of housing units, high cost of land, high incidental cost and difficulties with property registration as major impediments to the growth of their mortgage portfolios as opposed to 2016 where low income levels were cited as the major impediments,” said the CBK.

Other factors that were cited in the report were low income of potential mortgage takers, limited access to long-term financing, stringent land laws and lengthy charge timelines. The survey was done before the Treasury unveiled a policy proposal for the setting up of a Kenya Mortgage Refinance Company in April this year.