Five developers embark on rent-to-own schemes to lessen burden of homeownership | Prestige Real Estate News

With the parlous nature of the nation’s economy coupled with its inflationary trends, the dreams of prospective home owners may never be realised, as today, a vast majority of Nigerians, especially those resident in Lagos and other big towns and cities, are not finding it easy to have a roof over their heads because of high costs of housing units.

As a response to this challenge which, in Lagos, cuts across over 80 percent of the residents, some estate developers, public and private operators alike, have intervened with structured schemes that allow tenants to acquire their houses, pay rent over a period and own those houses.

Specifically, the developers include Mixta Africa, Legrande Properties, Alpha Mead, Family Homes Funds and Lagos State Ministry of Housing.

Mixta Africa, has an initiative for home acquisition focused on affordability. The initiative is called DUO which, according to Rolake Akinkugbe-Filani, the company’s Chief Commercial Officer, is a home-grown solution for mid-income earners who have difficulty paying outrightly for a house or experiencing delays in accessing mortgages.

The DUO gives renters opportunity to start out as tenants and end up as home-owners in a simple, straightforward transaction. “The thought of being a tenant paying your due rent and subsequently becoming a home-owner within 3 years is the major attraction for interested subscribers.

“This initiative gives you the opportunity of not only living your dream of becoming a home-owner but also enjoying the benefits of living in a serene environment that offers all the comfort, convenience and recreation necessary for a healthy life,” Akinkugbe-Filani added.

She disclosed that as a rent-to-own scheme, DUO is currently applicable to Mixta’s fully finished two-bedroom Marula Park home which is located in Lagos New Town, off Lekki-Epe Expressway with Beechwood Park and Lakowe Lakes Golf and Country Estate as its close neighbours.

Legrande Properties is a Lagos-based property developer, currently developing 5,000 affordable housing units in Lagos. It has come up with a rent-to-own initiative as a means to meet the huge housing needs in the country. But this initiative, according to Babajide Durojaiye, the Managing Director, is an opportunity for only contributors to the National Housing Fund (NHF).

“The initiative is premised on its new project called Alexandra Courts Estate in lbeju-Lekki which is a Public Private Partnership (PPP) with Lagos State Government and Federal Mortgage Bank of Nigeria (FMBN). “It also provides opportunity for loans to off-takers who are contributors to the National Housing Fund scheme up to N15 million,” Durojaiye assures.

At the Asiwaju Bola Ahmed Tinubu (ABAT) Renewed Hope City at Ibeju Lekki in Lagos, Legrande Properties has earmarked on 2,500 units for staffers of the TUC, NMA, NLC, NUT, and civil servants.

Alpha Mead’s Rent4Less and Rent-to-Own are two models this developer has initiated to enable affordability of housing. The company is worried that landlords, over the years, are charging one and two-years rent on their properties.

“Government is looking into monthly rent payment, but the approach is not the right one as you cannot legislate on what you do not own. What should be done is to meet the objectives of landlords and tenants for the system to work,” Femi Akintunde, the Group Managing Director, explained.

According to him, their Rent4Less approaches landlords with large units, pay upfront and fill it up with tenants who want to pay monthly while “Rent-to-Own combines our affordable housing solutions and mortgage accessing capabilities to help subscribers on Rent4Less own their homes.”

Family Homes Funds (FHF), is federal government’s intervention in the housing sector, FHF facilitates home ownership. Its mandate is to provide 500,000 housing units in five years and create over two million jobs in the process.

The Fund has a product it calls Help-to-Own which contributes 40 percent of the total cost of new homes for low-middle income individuals as loan. The product does not require repayment of the loan in the first five years after which monthly payments are made starting from an interest rate of three per cent, rising gradually to a maximum of 15 per cent in the 20th year.

This product is for first time home buyers and for individuals who can provide a minimum deposit of 10 percent of the purchase price and can take responsibility for any associated fees. The product is also for those who earns between N500,000 and N1.7 million yearly.

– Vanguard