500,000 or 200,000? President’s numbers for mortgages in Kenya both wide of the mark

• President Uhuru Kenyatta said most Kenyans didn’t own a home, and the country had fewer than 500,000 residential mortgages – possibly as few as 200,000.


• There were 26,178 residential mortgages in Kenya in December 2017.


• Nearly nine in 10 homeowners built their homes, while only 5% bought them.

In a recent interview on the state of the nation, President Uhuru Kenyatta said he was frustrated by how few people in Kenya had taken up home loans.

Housing is one of Kenyatta’s “big four” priorities as he serves out his final term in office. His administration plans to build 500,000 houses a year until 2022, with the help of a national housing fund.

Most Kenyans did not own a home, Kenyatta said during the December 2018 interview in the coastal city of Mombasa. “A nation of 45 million people has less than 500,000 mortgages. What does that tell you?” he asked. (Note: Kenya’s latest official population estimate is 47 million people.)

But later in the interview the president offered a lower figure. “As a country, since independence, we have less than 500,000 mortgages. I think it is probably closer to 200,000 mortgages.”

Are either of the two numbers close to the mark?

Survey of mortgages lent to homeowners

Africa Check contacted Kanze Dena, Kenyatta’s spokesperson, for the source of his figures. She promised to respond but is yet to do so. We will update this report when she does.

Who keeps tabs on mortgages in Kenya? “The central bank would have the overall picture,” Dr Peter Makachia of the department of architecture and environmental design at the Technical University of Kenya told Africa Check.

By law the central bank licenses mortgage lenders in Kenya. Every year, it surveys these companies about developments in the industry. The findings are released in an annual bank supervision report.

Its most recent report shows there were 26,178 residential mortgages in Kenya in December 2017. Nearly all were held by banks and had an estimated value of KSh223.2 billion.

In December 2016 the number of mortgages was 24,059. In 2010 the bank recorded 15,049 mortgages.

Why so few mortgages?

Makachia is the author of Innovative Financing for Housing in Sustainable Growth, a 2015 working paper for the Kenya Bankers Association.

He said the low numbers of mortgages in Kenya were a result of high initial costs, the many pre-conditions by lenders, high interest rates and people’s preference to “build incrementally”.

There are 11.4 million households in Kenya, according to the most recent household survey from the Kenya National Bureau of Statistics. Released in March 2018, it found that 60% (6.78 million) lived in homes they owned while 35.4% rented.

How do Kenyans get their homes?

Nine in 10 (88.6%) of homeowners built their homes, while 5% bought them. Another 2.8% inherited their homes and 2.3% received them as gifts. Some 1.2% (about 81,000 homes) were acquired in some “other” way.

The national treasury estimates Kenya’s national housing shortage at 2 million homes.

Conclusion: In December 2017, there were 26,178 home mortgages in Kenya

President Uhuru Kenyatta said he was frustrated by how few people in Kenya owned homes. In a country of 45 million people, he said, there were only 500,000 home mortgages – “probably closer to 200,000 mortgages”.

The central bank’s most recent survey of mortgage lenders shows there were 26,178 residential mortgages in Kenya in December 2017.

Some 60% (6.78 million) of Kenya’s 11.4 million households live in homes they own, and 35.4% rent their homes, the national statistics agency said in a March 2018 report. Of the homeowners, nine in 10 (88.6%) of homeowners built their homes while 5% bought them. Another 5.1% either inherited or were gifted, while 1.2% acquired them in some other way.

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Further reading:

https://africacheck.org/reports/is-top-ruling-jubilee-party-official-right-about-who-is-paying-income-tax-in-kenya/