The Ghanaian government plays a significant role in the individual national rent assistance program.
With the help of numerous national programs designed to either provide housing or make housing financially accessible, numerous governments have attempted to address Ghana’s housing shortage.
Dr. Kwame Nkrumah, the first president of Ghana, implemented a number of housing policies to encourage low- and middle-income earners to buy homes. The Roof Loans Scheme (RLS) was one of his interventions. It gave government workers soft loans to people who were building their homes at their own pace and wanted to roof them.
Additionally, the Bank for Housing and Construction (BHC) was established by Dr. Busia and his government to provide loans to citizens for the construction of housing.
People had access to low-interest loans for the construction of their homes through the BHC’s soft loans. Years later, when Tema Development Corporation (TDC) was established, they were required to sell to their first tenants at an interest rate of 2% and a repayment term of 25 years.
The nationwide affordable housing scheme projects were included in these homeownership policies. However, there have been some that have raised concerns regarding affordability and availability. In fact, unreliable sources claim that the majority of these projects are offered to high-ranking government officials for purchase as investments.
As a basic need, housing has become increasingly difficult to own or rent in recent years, particularly in major cities with high housing demand. In addition, players in the rental space, most particularly occupants or tenants are confronting enormous difficulties to manage the cost of a decent accommodation in major urban communities.
The Ghanaian government launched the National Rental Assistance Scheme (NRAS) on January 31, 2023, with the intention of addressing the short- to medium-term market challenges associated with rental failures in which landlords demand years’ worth of rent advance payments. This is to offer rent loans to people who work in the formal and informal sectors and have regular and verifiable income.
The principal period of the plan is to be carried out with GH¢30 million. Within the five regions of Greater Accra, Ashanti, Western, Eastern, Bono East, and Northern, this will provide eligible Ghanaians with a means of paying a low monthly rent, effectively eliminating the requirement for a rent advance payment.
This is a quick way to provide a loan for rent at 25% per month which ought to be finished within five to ten days for its application. The Scheme Managers would then deposit the rent directly into the landlord’s or landlady’s bank account. The goal of this plan is to make it easier for young people and households with lower incomes to get the minimum housing standards.
Mortgage interest rates have recently ranged from 30 to 45 percent per year with a maximum tenure of 20 years, in the midst of high property prices due to the high demand for land, high cost of financing, and high cost of building materials. Simply put, a loan for rentals costs 25%, whereas a mortgage loan costs 30-45%. According to standards set by the United Nations, the cost of housing should not exceed 30 percent of a household’s income.
Agency fees are another component of housing costs. Nowadays, people don’t have the advantage of time to go round looking for properties to lease or purchase. However, they are forced to rely on real estate agents to assist them in finding the ideal rental properties.
They can save time and money by using this method to find a place to live. Even in the sales market, it is now difficult to justify the use of an agent or lawyer in the acquisition process. Agents fulfill their responsibilities under the scheme by providing suitable properties for their clients to present to the scheme manager for rent payment.
The contracted agent’s retainer fees and professional fees, which are paid in commission, are the only upfront payments that the client may have to make in this situation. It is stated categorically that agency will not be eliminated by the NRAS.
In point of fact, agency is not prohibited; The law backs agency. The Real Estate Agency Act of 2020 (ACT 1047) provides direction for how an agency should operate. One cannot underestimate the value of a real estate agent’s assistance. The obligation lies on people to track down the right and professional agent.
There is a search function in associations like the Ghana Association of Real Estate Brokers (GAREB) that can help you locate the appropriate professional to assist you. Visit: https://gareb.com.gh/search-member for very reliable and professional agents. These members have gone through professional training and have been cleared by the Ghanaian police to be people who have no criminal record.
Finding an experienced agent and remaining safe as a consumer in the industry is the best course of action.