NHE studying lease-to-own model
The NHE, although it did not say when a lease-to-own model will be implemented, insists it will help to deal with a waiting list of 90 000 homes.
21 June 2019 | Infrastructure
The National Housing Enterprise is studying the possibility of introducing a lease-to-own option but has not indicated when it will make a pronouncement on the issue.
The enterprise this week hosted a stakeholder engagement to give an overview of projects that it has been engaged in since it was stripped of the Mass Housing mandate in 2015.
Speaking on the issue, its CEO, Gisbertus Mukulu, said that it was looking at the lease-to-own model as a possible solution to deal with the current shortfall of affordable housing.
“The lease option is something we have talked about. That is something that has creeped into our minds,” he said when updating stakeholders during a question-and-answer session.
A lease-to-own agreement is a deal in which you commit to renting a property for a specific period of time, with the option of buying it before the lease runs out. Lease-to-own agreements include a standard lease agreement and also an option to buy the property at a later time.
Rent is paid throughout the lease, and in some cases, a percentage of the payment is applied to the purchase price.
According to him, there was outstanding demand for the provision of over 90 000 houses countrywide.
NHE data showed that there was a demand for 20 082 houses in the northern parts of the country, 30 778 in the coast and 31 237 houses in the central areas.
“Our waiting list is over 90 000 houses. A total of 17 113 houses have been constructed since the conception of NHE and 1 468 houses have been constructed under the Mass Housing project,” he said.
Despite the massive shortage of affordable houses, Mukulu told stakeholders that the NHE was able to strengthen its loan book considerably.
According to him, it has now surpassed the billion-dollar mark in terms of total value.
“The value of our loan book surpassed N$1 billion,” he said. This is up from N$452 million recorded in 2016, Mukulu noted, while arrears were also down to 4.9% from the 5.95% recorded in 2016. Mukulu said the NHE was predicting annual projected growth of 15%.