East African Business Week (Kampala)
Mark Muhumuza
7 November 2009
Owning a house in Uganda is comparatively low largely due to the limited access to funding. Ugandans can however have their own house through getting a mortgage.
National Housing Company Limited (NHCCL) has signed a mortgage partnership with Stanbic Bank Uganda.
NHCCL has constructed 144 housing units that will be available for sale. However at the price of about Ugshs78m ($3900) then it would be hard for the user to access such an amount of cash. Stanbic Banks partnership will ease this on the projected home owner by financing them.
The mortgage lasts for 20% years at an interest of 16% per annum. The bank will pay 90% of the house price and the 10% will be paid by the home owner. The 10% is paid to NHCCL.
"We are aware of the constraints that have been stifling the growth of mortgages and we are exploring ways of how we can enable more Ugandans afford these homes," says Mr Stanley Mpipi the Chief Operations Officer Stanbic bank.
The traditional way of staying in house has been where one would have to pay rent or construct a house in which they would stay. However the cost of construction material and land remain high meaning owning a house becomes difficult.
Ugandans can however get to have their own house in a secure location, easy to access through the mortgage. They struggle to find land, a location and constructor is reduced by buying a fully complete apartment. The 144 unit project in Namungoona will be followed by another 268 unit in Kiwatule another suburb in Kampala. The Stanbic Bank mortgage will also cover the Kiwatule project.
Around Kampala people spend significant amount of their money on rent, yet they will never get to own the house. The rent paid around the city is significantly high and cases of defaulting have been high. Property is wealth and owning a house means one has acquired an asset that can be theirs. The housing mortgage is one way in which one can acquire a house.
"In order to have a vibrant housing market there is need to have finance, with the mortgage then NHCCL can be assured that their projects will get home owners," says Mr Joseph Kitamirike CEO NHCCL. He also says that housing is part of delivering public goods as housing is a basic need. NHCCL is Uganda's oldest real estate developer.
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