Here’s how to buy a house without paying any deposit

To the vast majority of urban Kenyans, owning a home remains is a pipe dream.

In fact, according to the National Housing Survey Report released earlier this year by the Cabinet Secretary for Lands, Housing and Urban Development, Mrs Charity Ngilu, only 4.2 per cent of Kenyan households could borrow money to buy or build a house.

This explains why the number of households paying rent rose from 17.25per cent in 1994 to 23.8per cent in 2005/06.

It is with this in mind that one property developer, Kings Pride Properties, has come up with what it calls the “zero deposit route” to owning a home.

The firm’s chairman, Maj (rtd) David Karau, says they have been working ways to enable the youth, as well as lower-middle and middle-income earners, to  afford their own homes. 

But even as the country’s property prices have hit an all-time high, Mr Karau says there are still ways of creating more opportunities to enable first-time buyers to get their own place at a reasonable price.

YOUNGER BUYERS

“If you can afford a minimum of Sh50,000 every month, you can walk into our offices and start paying for your home directly to us as we build it. And once we’re  done, you can occupy your home and continue  paying mortgage on it.

The mortgage is just a continuation of the payment and will have been pre-negotiated for our clients by us,” he explains.

Karau says the cost of most properties puts them beyond the reach of young people. 

“We realise that there are many hard-working people living in the city who are desperate to own homes but the high deposit obligations tied to mortgages are a constraint,” he observes.

“Our target client is actually any Kenyan with disposable income who is looking at the property market with scepticism and opts to buy a car instead of investing in a home first, just because the prices seem out of reach for them. Most of them fall within the younger age bracket,” he says.

The company already has projects underway in Ruaka (Glenwood gardens), Kiambu Road (Runda Park), Riruta (Vermont Park), and Thika (Castle Park).  A two-bedroom houses costs Sh5.95 million while a three-bedroom one is going for Sh6.95 million, depending on  the location.

“And because we know speculators might want to enter the zero deposit register more than once so that they can make a killing by selling later at higher prices, we are limiting every individual to only one unit,” he says.

Karau says this deal will be among those on offer during this year’s Kenyans Diaspora Homes & Investments Expo n Dallas, Texas, over the July 4 weekend.

PROHIBITIVE COSTS

The expo, which takes local real estate developers and financiers to the diaspora property buyer, was launched at the Worldwide Diaspora Conference organised by the government in Nairobi last month to link Kenyans in the diaspora directly with the real estate industry in Kenya.

“There have been numerous testimonials of Kenyans abroad eager to own property back here but then are often disappointed by relatives who receive money for investment but squander it instead of putting it to the intended use. We are organising the expo to offer professional alternatives to this problem,” Karau said.

In 2014, remittance inflows to Kenya increased by $137 million or (11 per cent) to $1,428.5, million compared with $1,290.6 million in 2013.

But for many Kenyans whose median income levels were estimated at between Sh20,000 and Sh25,000 by the survey, even such noble housing solutions still do not address the real since even an average income earner cannot access housing from the current market due to the prohibitive costs of land and building materials.

That is why renting households will continue to spend more than 30 per cent of their income on rent.