Mortgage financing underutilised for homeownership – Experts

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By Dada Jackson

Mortgage financing in developed climes is an instrument that has been employed by the less privileged and even to some extent by some well-to-do to access their personal houses

The institution has thrived in developed countries like the United Kingdom (U.K.), Canada, USA and some other developed climes.

But here in Nigeria, the opposite is the case with most prospective house owners not conscious of the advantages inherent in using the instrument as a means of accessing homeownership.

The awareness on the advantages of mortgage as a means to access homeownership has not been massive thereby resulting in the near zero percentage of Nigerians who own their personal houses.

This development has drawn the ire of professionals and stakeholders alike in the built environment who feel that should not be the case.

 Managing Director of Personal Homes and Savings Limited, Anthony Owuye said that mortgage financing in Nigeria is just emerging, even as he hinted that it is still the best instrument to access home ownership in any society.

According to him, mortgage financing in the country is still in its infancy. He was quick to add that much is not being done by the government to sensitize the people of the inherent advantage of using mortgage to access their own houses.

Owuye, a mortgage expert said that in developed climes such as the United Kingdom (U.K.), Canada, USA and other countries, even in some so-called third world countries, the use of mortgage to access homeownership is the ‘in-thing’ but here in Nigeria, he lamented, the opposite is the case.

This development, he attributed to the lack-luster attitude of government to the sensitisation of the masses to the advantages of mortgage.

Owuye whose company developed River Lake estate, Amuwo Odofin said that the array of policies being churned out by Central Bank of Nigeria (CBN) regarding financial institutions in the country has constrained operators in the sector to inject enough funds into the sector.

He added that government should as a way of driving the sector use part of the Pensions Funds (PF) to make the mortgage sector more viable.

In his own submission, Mr.Akin Olawore posited that the mortgage institution in Nigeria has not started at all not to talk of whether it is just emerging or it is in its infancy.

According to him, for there to be a viable mortgage system, there must be a secondary market that would buy from the primary market.He was quick to add that this is not the case because the funds available from the primary market is not sufficient for the secondary market to buy from.

Olawore who is the Principal Partner in the firm of Akin Olawore & Company pointed out, that in spite of the reforms by the Central Bank of Nigeria to regulate the mortgage sector; enough funds were not being injected into the sector to assist in driving it.

He said that the reforms carried out by the CBN in 2006 to galvanize the mortgage institution over a period of five years could not achieve the desired result due to the quantity of funds at the disposal of the operators in hr industry. He added that this development has not helped matters as It is still the same old story of having more people demanding mortgage in relation to inadequacy of funds to meet such demands.

His words ‘let me be frank with you. We don’t have any mortgage system in Nigeria so you can’t be talking about an emerging or an institution in its infancy’.

Corroborating Olawore’s position, the former Chairman of the Nigerian Institute of Architects (NIA) Lagos State Chapter, Abimbola Ajayi said that when people talk about mortgage financing in the country, her first reaction is to ask ‘do we have anything like that in place’.

Her words ‘Quote me, there is nothing like mortgage financing in the country as far as am concerned. What we have in place cannot be regarded as mortgage financing ‘

According to her, what is being practiced by the Federal Mortgage Bank of Nigeria (FMBN) as mortgage financing could be regarded as a ‘cash and carry thing’

She said that instead of the bank giving out mortgage to individuals, to  purchase their own houses, they go about building houses which price ranges from N60 million to N80 million.

Ajayi said that in developed climes such things don’t happen adding that most house owners purchased their houses through mortgage.

According to her, government should put in place, a more viable and sustainable mortgage system.

But a Chartered Builder, Godwin Erhabor posited that in his own estimation, mortgage institution in Nigeria is not in existence. He added that even it was in place, it is being underutilized because of inadequate funds available to drive the process into making it worth the while.

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