Lagos re-aligns home ownership to suit low-income group
Low-income earners can look forward to decent apartments in Lagos as the government is realigning its home ownership scheme with present economic realities. The realignment will allow people across social strata the opportunity to access the housing units being offered by the state.
After nearly two years of trying to fashion out what suits the market, the state government has jettisoned the previous arrangement that required first-time home seekers to deposit 30 percent cost of the flat sought for, under the Lagos Home Ownership Mortgage Scheme (LagosHOMS).
In what is seen as a departure from the past, which put the rich at advantage, the state has unveiled two pocket-friendly options to access its over 1,000 housing units up for grabs. The housing schemes being offered for the rent-to-own are the Sir Michael Otedola Estate in Epe, consisting of a room and parlour apartment as well as 1 and 2 bedroom bungalows, and the LagosHOMS housing estate at Igando in Alimosho, consisting of 1, 2 and 3 bedroom flats, and the Oba Adeboruwa Estate in Ikorodu, all consisting of 1 and 2 bedroom flats.
The new options include rent-to-own and monthly rental. These options have eliminated the 30 percent equity contribution that applicants for the LagosHOMS were required to pay. With the rent-to-own, successful applicants are now to pay only 5 percent of the cost of the flat, with the balance of 95 percent spread over a period of 10 years.
For example, an applicant for the Igando scheme, where a three-bedroom apartment goes for N6 million, is expected to make N300,000 equity contribution and the N5,700,000 balance is spread over 10 years.
The monthly rental, one of the new options, allows the prospective home seeker to rent the house like any other house in town provided he/she can pay a six month rent. The applicant moves into the house and continues monthly payment to the government without any prior huge payment.
Gbolahan Lawal, the state Commissioner for Housing, told BusinessDay that the options have been introduced into the home ownership structure, with the low-income bracket in mind and “in line with the resolve of Governor Akinwunmi Ambiode to run an all-inclusive government where every citizen feels belonged”.
“The rent-to-own and monthly rental is designed to give equal opportunity to eligible all residents of Lagos. This is unlike the old arrangement where first-time home seekers were required to deposit 30 percent cost of the type of house they wanted to buy,” Lawal said.
The new options, he said relieves home-seeker of the financial burden of 30 percent deposit, the commissioner said, adding that it would enhance the chances of low income earners.
Lagos had, early in 2014, under former Governor Babatunde Fashola, launched the LagosHOMS, the state government’s intervention aimed to enable more residents to own their own (first) homes through a mortgage scheme that offered mortgage package at a single-digit interest rate and for 10 years repayment tenor. The low point of the scheme, despite its considerable merits, was the 30 percent equity contribution successful applicants were required to make before they were given the mortgage facility.
“It is not easy for a winner of a three-bedroom flat, under the state government’s present housing scheme, to make an initial payment of about N5 million, for instance, before spreading the balance through monthly payments”, Governor Akinwunmi Ambode recently explained, stressing that this informed the decision to rework the scheme to suit present economic realities.
Lagos has an estimated population of 20 million people and about 30 percent of this population, representing about 900,000 people, cannot on their own afford homes and therefore require some form of ‘cheap’ housing with government’s heavy input.
A recent report on ‘The State of Lagos Housing Market’ which puts the housing deficit in the state at 3 million, notes that about 80 percent of the residents lives in rented accommodation, pointing out that the state government needs to build consistently 187,000 housing units annually for the next 15 to 20 years to close its housing demand-supply gap.