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Barclays signs mortgage finance deal with Centum Real Estate

Barclays will provide up to 100 percent financing for properties below Sh10 million and up to 90 percent financing for properties above Sh10 million. /FILE

NAIROBI, Kenya, Sept 24 – Barclays Bank of Kenya has announced a partnership with Centum Real Estate, the real estate arm of Centum Investment Company Plc, to finance buyers of the houses currently under development.

The agreement will see Barclays financing residential units – both off plan and established – developed by Centum Real Estate in Nairobi and the Coast of Kenya. Centum Real Estate is the region’s leading developer of mixed-use urban nodes and has embarked on a 5-year strategy under Centum 4.0 to deliver up to 10,000 units across East Africa, with a focus on the mid-market to affordable housing segment. The firm has broken ground on different projects across the portfolio with a total size of 2,822 units.

So far, several units have been identified under this collaboration which include those situated in Kilifi County along the Mombasa Malindi Highway namely Palm Ridge Estate and Awali Estate both under Vipingo Development Limited. The Palm Ridge Estate, which comprises 1,255 residential units, goes for between Sh2.5 million and Sh4.6 million for 1, 2 or 3 bedrooms and are part of efforts to support the ongoing government’s affordable housing ambition under the Big Four Agenda.

Others are residential units located at Two Rivers Development christened, The Riverbank Apartments, a high end 168-unit housing project, ranging from Sh16 million to Sh30 million and Cascadia Apartments a mid-market 400-unit housing project comprising of 1,2, or 3 bedroom units and duplexes, ranging from Sh8.5 million to Sh23 million.

Barclays will provide up to 100 percent financing for properties below Sh10 million and up to 90 percent financing for properties above Sh10 million.  Speaking during the signing of the partnership, Barclays Bank’s director of Retail and Business Banking, David Hardisty, expressed enthusiasm at the move stating that the partnership is in line with the bank’s purpose of bringing possibilities to life.

“As Barclays, we are committed to supporting the government achieve the affordable housing agenda. As a shareholder of the Kenya Mortgage Refinance Company, we will finance homes at affordable rates. In order to encourage affordable home ownership, Barclays will provide 100% financing for properties below Sh10 million. This will enable access to mortgages for individuals who are not able to raise the required 10 percent deposit,” Hardisty said.

Barclays has been playing in the mortgage space for many years offering some of the longest-tenured mortgages on the market of up to 25 years and will continue expanding its products and services in this area. To mention but a few, the bank offers several solutions including new home purchase plans, Buy to Let, Construction Mortgage, Plot and Construction, LaRiba Mortgage as well Foreign Currency Mortgages.

“We understand just how difficult it is for many people to own a home, despite this being a dream for most Kenyans. It is our desire to help all our customers achieve their ambitions in the right way,” Hardisty added.

On his part, Centum Real Estate’s Managing Director  Samuel Kariuki said “As a master developer, Centum Real Estate, is focused on launching residential nodes across its three sites in Kenya and Uganda, and is committed to ensuring that we deliver to promise as the region’s leading real estate developer and trusted investment brand.”

He added “The signing of this MoU with Barclays signals our commitment to ensuring that Kenyans have an opportunity to own a home in a master-planned city that integrates world class infrastructure and recreational amenities which seamlessly blend a live, work and play lifestyle. We look forward to supporting the government initiative on housing by rolling out similar solutions that will increase home ownership”

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High cost of housing units and limited access to affordable long-term finance has remained the leading mortgage market constraint in Kenya. This is according to the most recent Central Bank annual mortgage survey. Consequently, there were only 26,187 mortgage loans recorded as of December 2017, a slight improvement from 24,059 accounts as of December 2016.

The rise in demand is attributed to the introduction of interest capping law in September 2016, which has seen an increased demand for mortgage loans due to perceived affordability. There is also increased appetite for mortgage as more borrowers perceived that they can qualify for higher amounts. The demand is estimated at Sh2.1 Trillion against supply of Sh91.2 billion in value with demand projected to be at 2 million houses over the next 10 years with 2 percent (30,000 houses) mortgage opportunity financing.

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