Owning a home can be proof that one has achieved something in life. In the UK, home ownership in past years was an easy transition with almost everyone being able to afford a home even if it was a subsidized one by the government, who enabled poorer families to buy their homes mostly on council estates at much lower amounts than would obtain on the private market. It has turned out that some of these subsidized homes that were sold for fifty thousand pounds twenty years ago are now worth one million pounds!
In Nigeria we do not have many choices for home buying apart putting down huge sums of money to buy something you can afford either by borrowing by way of a huge mortgage or privately from family and friends. One of the options open to people wanting to own a home in a sought after areas, is to buy off plan. Buying off-plan can have advantages. It can be cheaper to secure a beautiful property before it is finished and it usually allows buyers to have a say in design features, fixtures and fittings, but there are significant risks to be aware of. You need to research your developer and development. Make sure you are clued up about the timeline of the project so you can plan your finances and when to move in. Bear in mind that there may also be extras you have to pay for such as service charges and fittings. Buyers should ensure the developer is reputable and has insurance so that if they fail to complete the project, you will get back your deposit. Use an independent lawyer to check their paperwork. If your property is going to be part of a wider development, find out when the other homes will be finished, otherwise you risk living in a building site for the first few years. Look at other properties the developer has built to see the value for money you are getting and to get an idea of what to expect once it completes. When buying a property off-plan, buyers are typically asked to pay a deposit of 10-30 per cent and sign a contract, usually prepared by the developer. If the buyer is forced to withdraw from the deal because they are unable to raise the balance of the purchase price, they can be sued by the developer. When buying off-plan, most buyers do not realise that if they do not complete the transaction, then not only will they forego their deposit, but they will be sued by the developer for further losses.’
It is hard to judge how a property will look just from the pictures but you can get an idea of what it will be like living there by finding out where in the development your property will be. Make sure you visit the site so you can visualise what it will look like and ask questions such as where the dustbins will be sited, where the generators will be and how many car parking spaces are provided and what the surrounding area is like. Get an idea of the size of the rooms so you can get the right furniture and make sure it suits your needs.Keep an eye on the property throughout the building process and conduct a ‘snagging’ survey near completion so you can spot any defects and get them fixed.
The Lagos State Government is carrying out a HOMS scheme which enables people on lower incomes to get a mortgage at a much subsidized rate of about 9% as opposed to 22% in the banks. Apartments are being built across the State, from Ikeja to Ikoyi, which will be sold at a much reduced rate. If the UK property success is anything to go by, then buyers into this scheme may be investing in a future gold mine for their retirement, when prices will defiantly go up.
It was reported this week, that the erstwhile Lagos State Governor yet again unveiled another affordable housing project which looks set to be a success. He unveiled the first phase of an initiative The Lease to Own Scheme that will deliver 10,000 homes to the state for low and medium income owners. The first phase is being built along the Lekki Expressway after Ajah. The first phase of the new estate will have 324 homes of apartments, bungalows and semi detached homes. Subscribers will be able to occupy the property of their choice on a rental basis to start out and can pay in monthly stages towards owning the property outright. A deposit of 15% will be required for the properties which will cost between N7-N23m. Payments can be made between one to ten years. This has been possible in private partnership with selected developers.
So as we can see, there are choices available for those who wish to get on the property ladder, just make sure your finances are in order, no matter how small. In a few years you will be reaping the rewards of your wise investment.
Caroline A. Akinlotan
