Realtors Association Urges Rent-To-Own Model for Affordable Housing Programme

January 31, 2024

The General Manager of the Kenya Professional Realtors Association (KPRA), Njuki King’ori, has urged the government to fully embrace the rent-to-own model, specifically the Tenant Purchase Scheme (TPS), for allocating Affordable Houses.

King’ori contends that through this model, the government can include the majority of Kenyans in the program aimed at revolutionizing home ownership in the country.

In this model, the government or the developer initiates an agreement with the tenant to determine an agreed-upon deposit. Subsequently, the tenant moves in to occupy the house and makes rent payments for a specified period, ultimately leading to homeownership.

King’ori emphasized that this model is the only way for more Kenyans to benefit from the program, considering that they may face challenges in making cash payments or obtaining credit from financial institutions.

“It is a challenge for a common Mwananchi to access a mortgage from the banking sector because there is the need of saving history, credit rating and so on. There is so much that comes to you before you get a mortgage,” he lamented.

Public-Private Partnerships to Lower Housing Costs

The realtor encouraged other willing financial institutions, organizations, and corporations to collaborate with the government and contribute funds to further reduce the cost of houses, making them affordable for every Kenyan.

He acknowledged that, despite the houses’ current cost still being relatively high, it cannot go below the capped price due to the elevated expenses associated with materials and other factors, making it challenging for the government to further reduce it.

“The factors affecting the cost of housing are land, materials, taxes and all those, even the raw materials like cement, stone. Some developers have even shifted to prefabs which have also become costly,” he noted.

King’ori at the same time urged real estate institutions to establish more affordable houses and sell them through the rent-to-own model, providing additional options for Kenyans beyond the government’s program.

Under the Affordable Housing Program, the government offers various payment options for the units, including cash payments, mortgages, and home financing through the rent-to-own Tenant Purchase Scheme over a 30-year period.

To be eligible for the AHP, Kenyans need to dial *832# or visit the Boma Yangu Portal on E-Citizen to register. Subsequently, they must save towards a deposit equivalent to 10 percent of the total house cost they prefer, ensuring consideration for allocation once the selected unit is completed.

The government aims to construct a minimum of 200 Affordable Housing Units in every constituency in Kenya during the first phase, and a significant portion of these units is anticipated to be completed by the end of this year.

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