By
Sara Okuoro |
Octagon Africa held a three-day consultative investment conference with key property industry players and pension industry leaders to combine insights from both regional and global experts on the implementation of the new mortgage regulation.
The conference followed the amendment of section 38 of the Retirement Benefits Act to allow members of retirement benefit schemes to utilize a proportion of their accrued benefits to purchase a residential house.
“This mortgage loan regulation is a good incentive for members to save knowing that as much as they are saving for their long-term objective, retirement, there is an immediate intervention when they want to acquire a house for themselves. Trustees of pension schemes will need to amend their investment policy statements taking into consideration new liquidity requirements. ,” said Octagon Africa Group Chief Executive Officer Fred Waswa during the launch.
The Mortgage Regulation 2020 stipulates that the funds accessed can only be used on a dwelling house for residential purposes with members accessing up to 40 per cent of the accrued benefits, capped at Sh7 million.
“We must work together as industry players and be deliberate about expanding the dream of homeownership to even more people. As a country, we have the lowest mortgage to GDP ratio in the world. We must therefore be deliberate in our efforts and work diligently to promote the affordable housing, more so homeownership which is a dream to 97 per cent of people, especially to people of low income,” said Charles Hinga Mwaura, Principal Secretary State Department for Housing and Urban Development.
The regulation excludes members who have attained retirement age or have taken the option of early retirement.
The Kenya Mortgage Refinance Company approximates that there are only 21,000 mortgages in the country signifying that the new regulation, if well implemented will bring about affordability, contributing to the Big Four Agenda.
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