In a recent report, the shortcomings of Nigeria’s mortgage system have been brought to light, highlighting significant barriers to homeownership for many Nigerians.

The report, which analyzes the state of the mortgage sector, identifies several key challenges that hinder the effectiveness of the system.

One of the major issues identified is the limited access to mortgage financing. High down payment requirements and strict eligibility criteria make it difficult for low and middle-income earners to access mortgage loans.

This has led to a reliance on informal lending sources or renting, further exacerbating the housing crisis in the country.

Another critical challenge is the prevailing high-interest rates in Nigeria, which significantly impede the growth of the mortgage sector. The burden of servicing loans becomes exorbitant for borrowers, discouraging potential homeowners and stagnating the housing market.

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The report also highlights the short loan tenures associated with Nigerian mortgage loans. This results in substantial monthly repayments, leading to financial strain and potential defaults. Longer loan tenures could alleviate this burden and make homeownership more feasible for borrowers.

Additionally, the lack of well-developed infrastructure, such as reliable property records and titling systems, creates uncertainty and increases the risk for lenders.

This results in financial institutions being hesitant to offer mortgages without a clear understanding of the property’s legal status, further complicating the mortgage process.

The unaffordable housing market in Nigeria is another significant challenge, with soaring property prices making homeownership unattainable for many. The limited supply of affordable housing exacerbates the situation, leaving potential buyers with few viable options.

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Experts have called for urgent reforms to address these challenges and make homeownership more accessible to Nigerians. These reforms include easing access to mortgage financing, lowering interest rates, lengthening loan tenures, and strengthening the legal and regulatory framework. Investments in infrastructure and affordable housing initiatives are also seen as vital in creating a sustainable and inclusive mortgage system.

The Nigerian government is urged to take decisive action to implement these reforms and address the pressing issue of the mortgage system’s inefficiency. By doing so, Nigeria can pave the way for a robust and functional mortgage system that benefits both individuals and the broader economy.

The post Nigeria’s Mortgage System Faces Major Hurdles appeared first on Housing TV Africa.

At a time in Lagos, Nigeria’s commercial nerve centre, when spate of building demolition in the state is on the increase, knowing how to get one’s building plan approval is the beginning of wisdom.

Today, many buildings have fallen to the state’s rampaging bulldozer for reasons bordering on lack of approved building plan, and contravention or distortion of approved layout by private home owners and commercial estate developers.

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Officials of the state government have described this as disregard for physical planning regulations, hence their advice that builders should adhere to building regulations and planning licenses.

“Property owners and developers should prioritize obtaining planning licenses before commencing construction,” Oluyinka Olumide, the state’s Commissioner for Physical Planning and Urban Development, advised recently.

The commissioner stressed the importance of adhering to the terms of these licenses as part of collective efforts to create a more sustainable and compliant built environment, assuring that the state government was committed to enforcing regulations without exceptions with the aim of ensuring that the law benefits the overall living conditions in the state.

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To be free from the embarrassment and loss of investment which many have suffered in the last few months over the demolition of their property, the state has put in place documents and requirements for those applying for building approval.

Among others, the applicant is expected to provide five original copies of architectural drawings, bearing the endorsement of the Architects Registration Council of Nigeria (ARCON).

Five original copies of structural drawings with accompanying signatures, seals, and supervision letters from a registered engineer under the Council for the Regulation of Engineering in Nigeria (COREN).

A calculation sheet, detailing the materials to be used, signed by a COREN registered engineer along with evidence of payment of required assessment fees, plus five original copies of mechanical and electrical drawings, where applicable.

A certified true copy of title documents, such as certificates of occupancy (CofO), registered conveyances, governor’s consent, or letters of allocation. This comes with a confirmation or clearance letter from the Lands Bureau, if title documents are in process with the Lands Bureau.

Clearance from the Land Use Allocation Committee (LUAC) where applicable; fire safety clearance from the Lagos State Fire Service (if applicable), Metroline corridor clearance from the state’s Ministry of Transport (if applicable), and Traffic impact assessment report from the state’s Ministry of Transport (if applicable).

Other requirements are Drainage clearance from the Office of Drainage Services, Lagos State Ministry of Environment (if applicable), Confirmation letter from New Towns Development Authority (if applicable).

Soil test report (if applicable), and Environmental impact assessment (EIA) report from the Office of Environmental Services, Lagos State Ministry of Environment (if applicable).

The applicant is also expected to provide letter of structural stability/integrity, signed by a COREN registered engineer. This applies to renovations of existing buildings.

Read also: 27 requirements to obtain building permit in Lagos

He is also required to provide Physical Planning Technical Report from the Physical Development Intervention Department of LASPPPA (if applicable); Clearance from the Nigerian Air and Civil Aviation (if applicable); Clearance from LASURA (if applicable) and an original sun-print survey plan.

There should also be Receipt of tenement rate or land use charge, or a sworn affidavit for payment if receipts are not available; Two passport photographs; Proof of Pay As You Earn (P.A.Y.E) returns for companies; A copy of the certificate of incorporation for companies and a Development levy receipt.

Expectedly, the state requires a copy of the current tax clearance certificate or evidence of updated personal income tax payment for the applicant(s), or the tax clearance certificate of two directors if the applicant is a company.

SOURCE: BUSSINESSDAY

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