The mortgage and housing sector needs palliatives, following the global economic challenges caused by the COVID-19 pandemic.

This is the position of mortgage and finance expert, Akintayo Oloko, who said mentioned palliatives and support in the form of intervention funds and reduced transaction costs.

Recall that with the pandemic’s effect on nations, businesses and personal income, the Central Bank of Nigeria, CBN, came up with a multi-trillion naira stimulus package, reduced interest rate on intervention loans, loan moratorium and permission for loan restructuring as palliative measures.

Oloko, who has over two decades experience in the sector, stressed that the mortgage/housing sector requires similar palliative, as there is the possibility that some salaries and self-employed income may also come under pressure.

On the nature of palliatives mortgage, housing need, he said: “We should have special fast track for building approvals during this period, reduction in building approval costs to bring down the associated cost of development, provision of off-take guarantees to developers, which makes it easier to access funds for development, or alternatively providing low cost funds for development.

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“Federal or state governments can provide these or set up bodies to drive such initiatives, hence basic infrastructures including roads, water and power should be excluded from development costs to make homes more affordable.”

He, however, stressed that new mortgage transactions will likely be less than what is experienced in more robust economic conditions, hence concerted efforts could be made to avert any significant adverse effects on the sector.

According to him, “there should be provision of intervention funds that will make single-digit interest rates available for mortgages as a catalyst for enhancing the purchasing capacity of individual borrowers.

“The intervention funds should be long-term and possibly 15 years or more,” Oloko, an alumnus of Lagos Business School and IMD, Switzerland, added.

He listed allowing individuals access to a reasonable percentage (25% or more) of their RSA towards making a down payment for buying a home, special fast track approval for titling, perfection of mortgages to make it possible for more transactions to be done and reduction in titling, perfection costs to bring down the associated costs of taking a mortgage to own your home are a part of the comprehensive palliative for the sector in this unprecedented COVID-19 pandemic.

Vanguard