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State seeks to help Kenyans buy its half million low cost houses

If you earn less than Sh100, 000 and can spare a third of your income, owning a home will be within your reach under a Government plan to spur a housing boom. The State has created a company to offer cheap loans to banks to target civil servants, self-employed persons, or salaried employees with mortgage of up to 30 years to reduce the pressure on repayment.

The Kenya Mortgage Refinancing Company (KMRC) will receive a Sh16.1 billion ($160 million) from the World Bank to start operations this month and will be owned by the Government and the private sector.

“KMRC will contribute to the broad objective of the Government of Kenya to deliver 500,000 affordable homes by 2022 targeting households with incomes of up to Sh100,000 per month,” the National Treasury said in a document pitched to bank bosses and sacco CEOs. Treasury Cabinet Secretary Henry Rotich yesterday told financial institution bosses in Nairobi that the Government aimed to own about 20 per cent of the firm and would pump in Sh1.5 billion fully paid share capital. The rest of the Sh5 billion authorised share capital will come from development partners, banks, and saccos interested in owning part of the remaining 80 per cent stake in a bid to professionalise it and release it from the clutches of bureaucracy.

There is a shortage of more than 200,000 housing units every year. Even with growing disposable incomes, Kenyans still find it difficult to buy homes using the mortgages currently in the market, which are usually short-term and expensive. In 2016, for the first time in five years, the number of mortgages in the country declined by 1.5 per cent from 24,458 to 24,085 attributed to less issuance of housing loans by banks, which tightened their underwriting standards following the implementation of the Banking Amendment Act 2015. The law capped lending rates at 4 percentage points above the Central Bank’s benchmark rate. A study by the Government showed that only 7 per cent of Kenyans living in rural areas can afford a house worth Sh1.7 million while in towns only 40 per cent can buy the least expensive built property.

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How fraudsters connive with top State officers to evict land owners

A cabal of land-hungry, well-connected and informed individuals continues to hold dozens of families and individuals at ransom through well-orchestrated schemes to dispossess them off of their property.

By colluding with employees at the Ministry of Lands, the Directorate of Criminal Intelligence, the Office of the Director of Public Prosecutions and the police, this group forcefully takes over private land through a mixture of forgeries, coercion and if all fails threats of death and death itself.

The courts have in the past demonstrated the impunity with which these individuals — top politicians, known businessmen and women and regime wheeler dealers — close ranks to fleece or forcefully take over land from helpless individuals and families.

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Karen Is Most Affordable High End Suburb

Nairobi’s Karen suburb offers the lowest price for an acre of land among high-end estates, a new real estate report has shown.

With an average price per acre of land in Karen going for Sh52 million against a market average of Sh87 million for an acre, it offers prospective land buyers the best bet for an address in some of Kenya’s high end estates, says Cytonn Investments’ latest report released this week.

Karen, according to the new study, recorded the highest increase in price or value of asset at 12.2 per cent since 2011 in low rise residential suburbs, against a market average of 4.5 per cent.

Even then, Cytonn shows that the Karen suburb, attracts the fairest asking prices for land now despite prices have risen over the years with an acre in going for Sh52 million up from Sh25 million in 2011.

Land in Nairobi’s reclusive Spring Valley is the most expensive followed by Nyari, an estate located along Limuru Road and which borders Muthaiga and Runda.

In Ridgeways an acre goes for Sh68 million, Spring Valley (Sh154 million), Kitisuru (Sh70 million), Runda (Sh68 million), and Nyari (Sh109 million).

Six years ago, an acre of land in Ridgeways was Sh24 million, Spring Valley (Sh64 million), Kitisuru (Sh32 million), Runda (Sh33 million), and Nyari (Sh54 million).

Given the high land prices in these estates with the exception of Karen, the report says that for these regions to experience significant increase in prices, the zoning regulations need to be relaxed to ‘‘allow for more space for people to live and thus more value can be derived from the land.”

Steven Oundo, the chairman of the National Construction Authority notes that when there is development, the demand for social services increases and this is followed by development of schools and hospitals among other amenities, which Karen is managing.

In the upmarket area, the luxury housing segment is expected to see growth as more ultra-wealthy Kenyans and foreigners buy homes and office spaces.

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Source| Business Daily Africa