More than 300,000 Kenyans have registered on the Boma Yangu housing portal and saved nearly Sh1.3 billion in anticipation of owning affordable homes.
The number far exceeds the outstanding mortgage loans advanced by all Kenyan banks, which stands below 30,000.
Principal Secretary of Housing and Urban planning, Mr Charles Hinga, yesterday said 322,422 aspiring home owners had registered on the State administered portal.
“This service is open to individuals applying for home allocation, employers, property developers and financial institutions registered and operating in the Republic of Kenya,” he said at a ceremony to mark the start of construction of 284 housing units in Kasarani, Nairobi, by the real estate subsidiary of Centum Investment Company PLC.
Ps Hinga noted that a majority of the registered Kenyans are seeking to own homes before getting into retirement.
Kenyan mortgage lenders have often been accused of locking out prospective home owners by overpricing housing loans.
The number of home loans advanced by all Kenyan banks decreased 3.7 percent to 26,971 last year, from 27,993 at the end of 2019, according to the Residential Mortgage Market Survey 2020 released by the Central Bank of Kenya (CBK).
To register for house allocation on the Boma yangu housing portal, one must be a Kenyan citizen, be aged 18 and above and have a valid national identity card. Applicants are required to submit their personal details, as well as their preferred houses.
Upon registration, applicants are allocated a unique identification number that they use to make monthly contributions to the Housing Fund.
They are allowed to choose between any of three schemes; statutory, voluntary and joint contribution.
Statutory contributions are mandatory and are limited to Sh2,500 per employee and employer. Contributors on a voluntary basis can send as much money as they wish.
Their contributions are not taxed at the time of withdrawal. Couples can also contribute jointly towards ownership, though one can also apply for the same individually.
“Members can access these contributions 15 years after their first contribution or when they attain retirement age,” said Mr Hinga.
The PS explained that to qualify for home ownership, one needs to have registered, and that the family’s status is considered. The Ministry will also consider demand across all the categories of housing.
“Those who do not get an allocation in the initial distribution will be put on a waiting list so that they are prioritised in subsequent allocations. Allocation will start as soon as the construction of the houses begins, and will be free of any human intervention and contact to ensure that transparency is upheld,” said Mr Hinga.
He noted that 11 affordable housing projects are currently under construction.
“There is rapid population growth coupled with fast urbanisation rates, which means that urban population goes up, but so does the demand for adequate and affordable housing. There is also a deficit in Kenya’s annual housing, with the shortage being more acute for Kenyans in lower income segments,” he said.
“Home financing inaccessibility is also exacerbated by exorbitant interest rates. Homebuyers pay as much as six times their monthly rent in order to own a home,” added the PS.
He explained that the Boma yangu initiative is just one of the many interventions put in place by the ministry to offer dignified housing and urban planning. Among these is the zero-rating of stamp duty for people buying their homes for the first time.
For as long as the potential buyer is saving to own a home, they will be entitled to a tax relief of up to Sh108,000 annually, and on interests paid on a mortgage up to a maximum of Sh300,000.
The project was, however, marred in controversy when in March 2020 some of the participants of the Boma Yangu initiative were turned away from viewing the Park Road houses even though they were already registered.
Some even complained of house switching, where one was successfully allocated to visit Park Road houses but later received messages to wait for a house visit in a different location.
In response, PS Hinga said that only 300 Kenyans at the time had met the threshold for house ownership at the Park Road housing development In Nairobi.