Property and pension industry players have welcomed the new mortgage regulations during a 3-day conference that combined insights from both regional and global experts on the implementation of the new regulation.
The Mortgage Regulation 2020 stipulates that the funds accessed upon retirement can only be used on a dwelling house for residential purposes with members accessing up to 40% of the accrued benefits capped at Ksh7 million.
“This conference aims to put our heads together and come up with administrative actions to assist the trustees in the implementation of this new regulation,” said Octagon Africa Group Chief Executive Officer Fred Waswa.
“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,” he added.
This conference comes after section 38 of the Retirement Benefits Act was recently amended to allow members of retirement benefit schemes to utilize a proportion of their accrued benefits to purchase a residential house.
Speaking during the official opening of the conference, Housing and Urban Development Principal Secretary Charles Hinga Mwaura commended Octagon Africa for bringing together such a forum with key experts from property, financial and pension sectors.
“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% of people, especially to people of low income,” he added.
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.