The Founding Partner of Diya Fatimilehin & Co, Gboyega Fatimilehin & Co, Gboyega Fatimilehin, has advised the government to subsidise mortgages in the country in order to address its housing gap.
According to Fatimilehin, who spoke with our correspondent on the sideline of the firm’s 40th anniversary, in other countries mortgages are subsidised, adding Nigeria should adopt this model.
He said, “Today, any bank that gives a mortgage will have to wait for 10 years to recoup the money and re-invest elsewhere. But if the market is properly funded and structured, the moment someone gets a loan, a bond can be issued on it so that the mortgage system can be sustainable in the country.”
In the same vein, the Head of Practice, Diya, Fatimilehin & Co, Idowu Bakara, noted that there was no good mortgage system in the country.
He said, “If you want to have an operational mortgage system, you must know the income pattern of the person applying, thereby making it convenient and affordable for that person to pay. When giving a mortgage loan, and, thereafter, giving a short time frame, it is not feasible. This is why the government needs to come in and resuscitate mortgage institutions so that as they are giving these loans out, the government is there to cushion the effect by giving them the funds back so that they can continue running their businesses.
“For the mortgage system to work it needs a longer time. None of our banks can give you a mortgage for 20–30 years in Nigeria. Just imagine giving a short-term mortgage loan to a teacher, where do you expect such a person to get the money within five years? The only thing you are telling such a person is to start planning to steal.”
Bakare urged for a scale-down in the housing system in the country, adding that building detached houses without any request for it was not effective.
He added, “We need to tailor our development towards the data and the users’ needs. This is why we need the government to formulate the right policies, and back up the financial institutions to make mortgages available.”
Meanwhile, the Strategic Adviser, Diya, Fatimilehin & Co, Lanre Olutimilehin, said the mortgage system was still underdeveloped and the penetration was very low.
He said, “The big part of the low penetration is the cost of financing, driven by the underlying cost of funds for mortgage banks. However, the mortgage system as it is would not be accessible to low-income earners for now.
“Before a mortgage can be made accessible, the cost of housing has to come down. Though some efforts have been made, there are some structural adjustments that need to be done. In addition, the cost of building materials needs to come down and this starts with the improvement and localisation of the manufacturing base.”
Olutimilehin noted that if there were more skilled workers to build, it would reduce the cost of housing and strengthen affordability.
