As inflation shaves off savings of many low and middle-income class Nigerians amid rising construction costs, homeownership plans are being deferred as untamed food prices continue to bite deeply into household incomes.
Above Info graphic demonstrates how surging inflation now force Nigerians to suspend plans to become house owners as food security becomes paramount.• Experts urge govt to adopt social housing, review NHF scheme
Though the National Housing Fund Act 2004, states that all Nigerian employees and income earners, whether in paid employment or self-employment, are entitled to the NHF scheme and can register as long as they’re 21 years of age and whose salaries are more than N3,000 per annum, there are worries that the housing gap between the high- and low-income earners may widen as contributions become inadequate for mortgage requirements.
The affordability crisis cannot be addressed unless it considers all segments of the housing stock-including public housing and informal housing that are now the only housing affordable to large segments of the urban population – while creating conditions for the private housing sector to reach further down market.
A prospective applicant who wishes to obtain a loan to build a house is expected to have his/her land, as well as an acceptable title to the land prior to the application for an NHF loan. In many states, land prices have skyrocketed beyond the means of low-income earners, while land owners find it difficult to obtain titles due to the exorbitant rate.
Therefore, tenure of mortgage is based on length of service remaining for a civil servant as mortgage facilities are not extended beyond date of retirement. Also, another issue is mortgage finance interest rate as mortgage repayment includes the principal and interest – Federal mortgage charges six per cent yearly, while the Federal Government Staff Housing Loans Board charges three per cent yearly.
He called for increased capitalisation/subvention of FMBN and FGSHLB, saying, institutions that have not contributed to NHF as required by law should be made to pay up. While FMBN Act needs urgent review, FGSHLB should consider securitisation of its funds and transformation to Federal Civil Servants Mortgage Bank.
Adebayo emphasised that there is still a problem regarding how much a worker who earns N30,000 monthly can afford to buy a house. “That is the biggest problem threatening the NHF. It needs to be overhauled. The law setting up NHF needs to be reviewed, it has become obsolete. Amount a worker will benefit from the fund has to be increased.
She said it is only through social housing that the government can bring succour to the civil servants and others earning about N100,000 that desire to own homes. He urged the government to build different homes, qualify people and give them free houses to stay. Environmentalists in Cross River State have called for the protection of Afi Mountain Wildlife Sanctuary and Drill Ranch in Buanchor community of Boki Council of the state.
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