Nigerians may start paying property rent on a monthly basis going by the latest resolution between the federal and state governments .
This resolution came at the sixth meeting of the National Council on Lands, Housing and Urban Development (NCLHUD) – the highest gathering of senior officials from the federal and state governments, as well as stakeholders and experts in the industry.
Highlights:
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.
The officials also resolved that the law would be enforced.
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 (FMBN), if included in the housing finance policy, would address the problem of poor access to housing finance.
The bank 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.
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.
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