Uganda: Banks Move to Close Uganda's Housing Gap

Jul 12, 2017 | The Monitor; All Africa

Uganda's housing deficit that currently stands at two million units continues to grow by 300,000 units per year, Housing Finance Bank (HFB) has said.

This, according to housing experts, means concerted efforts are needed to close the housing gap and provide reasonably priced housing solutions to the people. A partnership between HFB and property developer Comfort Homes Uganda Limited has sprang out of this need. The deal will enable Ugandans who cannot pay cash immediately to buy houses over at least 20 years. "We will give long term loans because you are going to be living in this house and paying a mortgage. It means it will increase the number of affordable houses available on the market and more people will take on mortgages," HFB managing director Mathias Katamba, said last week at the company's head office in Kampala. The bank will lend between 80 per cent and 100 per cent of the total price of the houses at a 17.5 interest rate per year. According to the Uganda National Housing Policy, affordable housing is housing for which the associated financial costs are at a level that does not threaten other basic needs and represents a reasonable proportion of household income. In a similar move to increase house ownership, Centenary Bank last year introduced a micro housing finamce loan as low as Shs100,000 to enable people who can save between Shs10,000 to Shs60,000 a day to construct habitable homes. Challenges Several factors are depriving Ugandans of low cost housing. Mr Katamba said supply is far from sufficient and is still constrained by the high cost of construction. Last year, Knight Frank managing director Judy Rugasira pointed out that attempts have been made to provide better housing but current house prices are very high and continue to rise between 10-15 per cent per year amidst low growth in household income. Read more on All Africa. Source: All Africa