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FG, States Agree On Monthly Rent Payment by alfanio(m): 9:42am On Sep 07, 2017 |
Nigerians may start paying property rent
on a monthly basis going by the latest
resolution between the federal and state
governments on the matter, OKECHUKWU
NNODIM reports
The clamour for the monthly payment of rent
by clients in the housing sector received
attention at the recently concluded sixth
meeting of the National Council on Lands ,
Housing and Urban Development .
The council is the highest gathering of senior
officials from the federal and state
governments , as well as stakeholders and
experts in the built industry .
At the meeting of permanent secretaries
during the council, senior government
officials from the 36 states and Federal
Capital Territory, as well as those from the
Federal Ministry of Power, Works and
Housing ( Works /Housing sector) agreed to
enact a law that would allow monthly rental
payments across the country.
In a 52- page report on the meeting of
permanent secretaries at the sixth NCLHUD ,
which was obtained by our correspondent
from the FMPWH in Abuja , the officials also
resolved that the law would be enforced, as
they noted that its enforcement would
enhance access to housing finance.
The Minister of Power, Works and Housing ,
Babatunde Fashola , recently charged property
developers to reduce their rents and the
value of properties in consideration of the
economic hardship across the country .
He advised them to work out ways of
tackling the problem of high house rents and
advance payments , particularly in major cities
across the country .
Fashola had said, “ Let me just ask you a
question since everybody is here. Is there
nothing that we can do in this country about
this practice of demanding rent for two, three
years in advance from people who get their
salaries monthly in arrears? Is there nothing
that can be done ? We can ’t continue like
this. ”
The minister , while buttressing his argument ,
insisted that operators in the sector must
question the practice, stressing that the
increase in the cost of other commodities
could also be as a result of high rents being
charged by developers and landlords.
He said, “ We must first of all question the
practice , look at its strengths and weaknesses
and its damage to the entire economy. For
instance , as a minister , my salary is N 900 ,000 ;
so, when you ask me to go and bring rent for
two years in advance that I have not earned ,
and I actually bring it , shouldn’t you start
worrying?
“ So, when you suddenly see that the prices of
water, food , etc ., begin to spike, are we really
gaining? Because one way or the other, I ’m
going to get back what you collected from
me . It ’s a matter of conscience. Can you pay
for a taxi before you board it ?”
In order to address the issue , permanent
secretaries from the relevant agencies in the
federal and state governments resolved at
the meeting during the sixth NCLHUD to
produce a law that would allow the monthly
payment of rent.
In the Memorandum on Provision of
Adequate and Affordable Housing, which was
submitted at the meeting by the FMPWH , the
council noted that the “ enactment of the law
would allow monthly rental payments and its
enforcement would enhance access to
housing finance.”
They also upheld that the rent -to- own
scheme of the Federal Mortgage Bank of
Nigeria, if included in the housing finance
policy, would address the problem of poor
access to housing finance.
They further recommended that all tiers of
government should improve on intervention
strategies to provide affordable housing, as
well as provide enabling environment for
active participation of the private sector in
housing delivery .
The permanent secretaries urged the federal
and state governments to consider all income
groups in their housing delivery programmes,
and to encourage the development of
secondary mortgage market in order to
strengthen mortgage refinancing .
At an earlier meeting with Fashola in Abuja,
the Chairman , Estate Surveyors and Valuers
Registration Board of Nigeria , Mr . Olayinka
Sonaike , stated that the pressure on
operators from lenders with respect to the
repayment of loans was one major factor that
often warranted the demand for advance
payment of rent by property developers.
He , however, stated that if there were
substantial mortgage loans from the FMBN ,
the situation would not be the same .
In its submission on the matter at the sixth
NCLHUD , the FMBN admitted that housing
affordability had been a major challenge due
to low purchasing power, but argued that
while down payment on mortgage was up to
40 per cent and interest on mortgage loan
was between 16 and 32 per cent , the FMBN’ s
National Housing Fund Scheme offered six
per cent interest on its loan products.
The bank, in a memorandum it submitted at
the council meeting , stated that its rent- to-
own concept adopted transaction dynamics
under which real estate property was leased
to beneficiaries in exchange for monthly
payments , with option to purchase the
property at some point during the agreement
period .
It said, “ Under the agreement terms, the
FMBN ( the landlord ) collects monthly rent
payments from beneficiaries ( the tenants )
over a specified period to accrue what would
have been a bulk equity contribution.
“ Beneficiaries are given the opportunity to
move into the properties as tenants from
commencement of the transaction, and after
a two- year period, the rental arrangement is
converted to a mortgage transaction .
Accordingly , the balance of the house price is
repaid through mortgage repayments. ”
The bank further stated that under the
scheme, there would be improved mortgage
inclusion and access to affordable housing to
more Nigerians who would otherwise be
unable to afford equity down payments .
“ Up to 100 ,000 new homeowners could be
created within the next three to four years
through this product to boost the present
administration’ s one -million-new -
homeownership target,” it added .
It urged the council to endorse the adoption
of the rent-to -own concept by all tiers of
government , in order to improve housing
inclusion, growth and economic prosperity .
The FMBN also stated that subject to the
inputs of the council and the approval of the
works and housing minister , the bank
intended to pilot the rollout of the concept
over a 12-month period , commencing with
workers of the FMPWH and the mortgage
institution . |
Re: FG, States Agree On Monthly Rent Payment by alfanio(m): 9:46am On Sep 07, 2017 |
Good move, this has the potential to ease the pressure on people and allow people plan according to their salary or personal income. It will also free up funds for investment in other income generating ventures. |
Re: FG, States Agree On Monthly Rent Payment by jfkenny(m): 10:52am On Sep 07, 2017 |
Nice development |
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