High interest rates and high costs of building materials have been listed as the top barriers to accessing housing finance for low and middle-income households.
A report released on Thursday by Habitat for Humanity (HFHI) also listed unstable income and lack of collateral as other factors that hinder Kenyans from accessing housing finance.
From the survey’s sample, 41 per cent of the respondents living in urban areas owned a house.
Access to housing finance by residence was as follows; urban areas (8 per cent), peri-urban (12 per cent), and rural (16 per cent).
Additionally, the findings indicated that 56.2 per cent of the formally employed population had access to housing finance loans compared to only 29.2 per cent for the informally employed population.
Land tenure rights and limited access to basic infrastructure and utilities, such as water, sanitation, electricity, road networks, and transportation, also impede housing development and make certain areas less attractive for investment according to the report.
The study was conducted in 11 counties including Bungoma, Embu, Kajiado, Kakamega, Kiambu, Kilifi, Kisii, Kisumu, Machakos, Mombasa, Nairobi, Nakuru, Nyeri, and Usain Gishu.
Titled "Research on systemic barriers towards access and usage of housing finance in Kenya", the findings are set to inform critical review and develop strategic short, medium and long-term plans by the various housing stakeholders.
The report recommended interventions that can help it create a solid foundation to build an inclusive housing finance system.
"Address the need for incremental building by exploring the development of financing solutions that promote incremental housing development, such as supporting self-built housing," the report recommended.
The report also recommended increased funding for housing finance initiatives, such as providing grants or low-interest loans to financial institutions that provide housing finance.
The report comes at a time when the government has prioritized providing affordable housing as one of its pillar projects to ensure that low and middle-income households have access to decent and affordable housing units.
The survey was conducted in partnership with Kenya Mortgage Refinance Company (KMRC) and the Association of Microfinance Institutions of Kenya (AMFI- K).
