The Minister of Power, Works and Housing, Babatunde Fashola

The Minister of Power, Works and Housing, Babatunde Fashola, has said that the Federal Government has concluded plans to recapitalise the Federal Mortgage Bank of Nigeria (FMBN) with N500 billion capital base.

Fashola made this known on Thursday in Abuja at the Business Day Real Estate Roundtable and Exhibition programme.

Speaking on the theme: “Innovative Housing Finance Model as a Catalyst for Home Ownership,” Fashola noted that the recapitalisation would boost housing development.

Fashola stated that the recapitalisation would create more opportunities for Nigerians earning a living to own a home and tackle housing deficit in the country.

The current capital base of FMBN is N1.5 billion, the Primary Mortgage Banks (PMBs) is N5 billion while that of commercial bank is N25 billion.

The minister also advocated for the payment of house rents in arrears to assist low income earners in the country.

He appealed to home-owners and landlords across the nation to be considerate to the low income earners in rent payment though it was against what was obtainable in the country.

Fashola expressed dissatisfaction about the practice of advance payment in Nigeria, adding that all the developed economies being compared with Nigeria did not collect one year’s rent in advance.

He noted that most workers, who earned salary regularly and could even afford to pay rent, did not receive their salaries in advance, but in arrears.

“If you ask me to go and bring in advance, one year’s rent, to what I am going to earn monthly in arrears, how feasible is that?

“Even my salary as a minister is paid at the end of every month, not even at the beginning, then why should landlord be asking for next year’s salary. And we are complaining that there is corruption?

He recalled that during his tenure as a Governor in Lagos, he tried to pass the resolution to the state council then, but the outcome was not peaceful.

“Those who get paid weekly pay their rents weekly; those who get paid monthly pay monthly rents,” saying that the masses, unlike the well to do in society, cannot afford to pay in advance.

The minister also recommended that there should be a Landlord-Tenant-Employer’s relations, whereby the landlord would reach an agreement with the tenant’s employer to ensure deduction of rent on a monthly basis from the tenant’s salary.

Fashola, however, charged all landlords in Nigeria, to start from June 6 to agree to take one month rent in advance.

The Real Estate Development Association of Nigeria (REDAN), however, called for synergy and regulation of the sector as well as ensuring enabling environment by the three tiers of government.

REDAN President, Rev. Ugochukwu Chime said that creating enabling environment would assist the real estate developers to develop estates and aid the FMBN in provision for the finance.

“The greatest problem we have is lack of legal infrastructure that will ensure that the housing industry thrives.

“We are proposing that the Federal Government should hasten up in giving the FMBN at least N500 billion to boost housing development.

The Surveyor called for the amendment of mortgage and foreclosure laws, which he described as critical to the economy.

He also urged the government to ensure that land administration laws were in place to enable housing to contribute immensely to the Gross Domestic Product (GDP).

The Roundtable was aimed at fostering collaboration and to ensure that the stakeholders are confined to playing better role for the growth of the sector.