The Mortgage Regulation 2020 has the potential to increase the elusive home ownership in the country, key property industry players and pension industry leaders have said.
The regulation stipulates that the funds accessed from the Kenya Mortgage Refinance Company can only be used on a dwelling house for residential purposes with members accessing up to 40% of the accrued benefits.
“The regulation comes after section 38 of the Retirement Benefits Act was recently amended to allow members of retirement benefit schemes to utilize a proportion of their accrued benefits to purchase a residential house. It caps the funds at Sh7 million and excludes members who have attained retirement age or have taken the option of early retirement,” said Octagon Africa Group CEO Fred Waswa. He was speaking at a stakeholders conference.
Principal Secretary State Department for Housing and Urban Development Charles Hinga Mwaura lauded the move taken by Octagon Africa trustees to bring players together and deliberate about expanding the dream of ownership especially now that there are only 21,000 mortgages in the country as per the mortgage refinance company.
“As a country, we have the lowest mortgage to GDP ratio in the world. We must therefore be deliberate in our efforts and work diligently to promote the affordable housing, more so homeownership which is a dream to 97% of people, especially to people of low income,” said Mr Hinga.