Mortgage Only Funds 5% Of Existing Houses
The Mortgage Banking Association of Nigeria has said that only five per cent of the 13.7 million housing units in Nigeria are currently financed by mortgage firms.
He, however, stated that the figure increased between 2010 and 2016 with 181,519 transactions initiated in the industry.
Akinlusi, who is also the Chief Executive Officer of TrustBond Mortgage Bank Plc, said the industry was constrained by unfavourable macro-economic indices including high-interest rate, inflation and property value appreciation, among others.
He said, “Less than five of existing houses are financed with mortgage loans due to the dearth of titled properties. Creation of mortgages is hinged on the certainty of title to land as the mortgage is a creation of secured title. There is also difficulty in registration and transfer of title.
“In some states, it could take from six months to two years for a title document to be prepared; and there are too many processes, which are slow, cumbersome, unreliable and inefficient. The high cost of title registration and transfer, which is usually 15 per cent of property value but as high as 22 per cent in some states, is also a major problem.”
The MBAN’s Executive Secretary, Mr. Kayode Omotosho, also highlighted other major problems as the non-automation of government process in registration and land titling; and inadequate cadastral system.
According to him, there are issues of difficult foreclosure and eviction law and the problem of accessing the NHF by a majority of Nigerians due to the inadequacy of funds to support the scheme as some key stakeholders are not making any contribution into the scheme as stipulated by the NHF Act.
He, however, stated that public awareness was gradually being created by stakeholders to encourage more people to invest in properties using mortgage.
“Although there are no available statistics on the extent of coverage of awareness yet, more will still need to be done in this area,” he stated.
Akinlusi also sai that stakeholders were working on improving the mortgage industry with several initiatives such as ‘My Own Home’, a Public-Private Partnership offshoot of the Nigerian Housing Fund Programme aimed at increasing access to housing finance and housing industry in the country.
He said the initiative would also inspire young Nigerians to key into the mortgage process and start owning homes.
He, however, stated that the figure increased between 2010 and 2016 with 181,519 transactions initiated in the industry.
Akinlusi, who is also the Chief Executive Officer of TrustBond Mortgage Bank Plc, said the industry was constrained by unfavourable macro-economic indices including high-interest rate, inflation and property value appreciation, among others.
He said, “Less than five of existing houses are financed with mortgage loans due to the dearth of titled properties. Creation of mortgages is hinged on the certainty of title to land as the mortgage is a creation of secured title. There is also difficulty in registration and transfer of title.
“In some states, it could take from six months to two years for a title document to be prepared; and there are too many processes, which are slow, cumbersome, unreliable and inefficient. The high cost of title registration and transfer, which is usually 15 per cent of property value but as high as 22 per cent in some states, is also a major problem.”
The MBAN’s Executive Secretary, Mr. Kayode Omotosho, also highlighted other major problems as the non-automation of government process in registration and land titling; and inadequate cadastral system.
According to him, there are issues of difficult foreclosure and eviction law and the problem of accessing the NHF by a majority of Nigerians due to the inadequacy of funds to support the scheme as some key stakeholders are not making any contribution into the scheme as stipulated by the NHF Act.
He, however, stated that public awareness was gradually being created by stakeholders to encourage more people to invest in properties using mortgage.
“Although there are no available statistics on the extent of coverage of awareness yet, more will still need to be done in this area,” he stated.
Akinlusi also sai that stakeholders were working on improving the mortgage industry with several initiatives such as ‘My Own Home’, a Public-Private Partnership offshoot of the Nigerian Housing Fund Programme aimed at increasing access to housing finance and housing industry in the country.
He said the initiative would also inspire young Nigerians to key into the mortgage process and start owning homes.
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