A university lecturer, Prof. Timothy Nubi, on Tuesday told the Federal Government to restructure Nigeria’s mortgage system to position it for better service delivery.
Nubi, who is of the Department of Estate Management in the University of Lagos, made the call in an interview with the News Agency of Nigeria (NAN) in Lagos.
He said that solution to the nations’ housing deficit would not be possible without a functional and sustainable mortgage system.
Nubi said that Nigeria had failed to solve its housing problem because short-term funds were being used to finance long-term projects.
According to him, housing projects are long-term projects and should be funded with long-term loans.
Nubi argued that a viable mortgage system was the bedrock of housing development.
“Presently in the country, accessing funds to build houses is very difficult, due to the near-absence of a functional mortgage sector.
”This is despite the fact that mortgage system had been in operation in the country for many years.
“The fact that its impact has not been felt in the sector compared to what obtains in advanced countries shows that a more pragmatic strategy must be adopted to bridge the nations’ housing deficit.”
Nubi said that other developed and developing countries were able to overcome their housing problems because they gave mortgage loans at single digit interest rates.
“And the loan is spread over a long period of time to enable the developer recoup the money and payback,’’ he said.
The don said that interest rates or charges payable on a mortgage and the tenure of the loan were critical elements of affordability.READ ALSO – Estate Surveyor attributes quacks to the rate of unemployment in Nigeria
He suggested that the mortgage system should be streamlined to be given at single digit interest rates and spread over a long period of time, like 20 to 25 years.
Nubi noted that embracing such system would enable more people to be able to take and repay mortgage loans.
“The Primary Mortgage Institutions still lend at very high interest rates in addition to asking for deposits which negate the quest for a virile mortgage sector that would aid house ownership.
“If government structures 20-25 years mortgage at 7-8 per cent — which is even still higher anyway, many Nigerians will own houses.
“Because the rent Nigerians are paying right now is more than enough of what they need to service their mortgage and own the house,” he added.