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Problems of Housing Finance in Nigeria

The Managing Director, UACN Property Development Company (UPDC) Plc, Mr. Hakeem Ogunniran, has identified five drawbacks to housing finance in the country. These include cost, character, capacity, collateral and conditions.

This is coming on the heels of a World Bank report. The  findings of Word Bank Group, contained in “Doing Business in Nigeria 2014” under the section “Understanding Regulations for Small and Medium-Sized Enterprises, revealed that an investor in the country’s real estate sector has to go through 11 procedures of over 78 days, and also pay 15.8 per cent of the value of the property before a transfer of property can be achieved.

This situation has made the country to be rated as one of the most difficult and expensive places to register property in the world.

Ogunniran said the problem with land registration and titling was much a systemic issue, explaining that the system is people-driven and not process-driven. He, therefore, suggests that there should be a “one-stop-shop” for perfecting title and should be made business-like.

The report, which is based its submission on findings examined in the 36 states and Federal Capital Territory (FCT), held that the easiest place to register a property is in Zamfara State, where it takes nine procedures, 31 days, and eight per cent of the property value.

In Abia State, it takes 13 procedures, 108 days, and 15.9 per cent of the property value. The report, which blamed the delays recorded while trying to register property on government bureaucracy, said “the time is largely dependent on a single requirement: the state governor’s consent, which accounts for 65 per cent of the total time required, on average. The delay varies from four days in Gombe to six months in Anambra or Keffi.”

As a way forward, the Managing Director, Resort Savings and Loans Plc, Mr. Abimbola Olayinka, said the Land Use Act should be used to empower the people and not as an economic and political tool by state chief executives, adding that the Act should be taken away from the constitution so that it could be easily tinkered with.

Olayinka said land administrators should adopt what he called “three-one-three strategy” for land registration. This means that land titles should be perfected in three days at one central place, and at the cost of three per cent of the value of the land.

Similarly, the Chief Executive Officer, Imoleayo Properties, Mr. Kayode Oyedele, explained that eliminating the bottlenecks created by the land and property laws and regulations will go a long way in encouraging mortgages.

He revealed that previously in Ghana, there is a dysfunctional land administration, long and expensive procedures that lasted up to five years and involving six different agencies supervising the process, leading to inefficiency of the system.

But following the reforms by the Ghanaian government, property registration in the country, Oyedele said, was cut to 34 days and queues at the lands commission disappeared, making it possible for the mortgage sector to thrive.

And following further improvement to the system, today in Ghana, it takes 10 days to register a property.

“A similar experience happened in Egypt, where high fees and inefficient government agencies that hindered the process of real estate was eliminated by reducing property registration fees; simplifying the property registration process thus encouraging citizens and companies to obtain titles,” he submitted.

Source: The Nation

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