In September, Dami began searching for a mini flat in Surulere. She had been living on the Island until she got a new job. Judging from her previous house rent, her budget was below N1 million. Until she started house hunting when she realised the house rents, even on the Mainland, had fiercely inflated.
In the past four years, house rents in Lagos, Nigeria’s economic capital, have increased by 100 per cent annually, according to a report by NairaMetics. Recent government policies and economic reforms, like the over 100 per cent increase in fuel prices compared to early 2023, have contributed largely to the rise. Prices of building materials have skyrocketed, and new house builders and landlords blame the price increase.
While Dami understands the economic crisis is a factor in the increase in house rents, one other factor that exorbitantly influences house rent is house agents. House agents, mostly untrained and uncertified, serve as the middlemen between landlords and potential tenants. They go through the struggle of house-searching, securing apartments and house inspections. There are thousands of house agents in Nigeria because anyone could wake up tomorrow, print a banner and declare themself a house agent, just because they belong to a WhatsApp group where available rental listings are shared.
“Agency, third parties and saboteurs are now plenty in real estate. Sometimes, you have to pay two to three agents to get a property,” Ridwan Oke, a real estate lawyer, said. For a house rent of N500,000, house agents could charge N200,000 more, breaking their charges into agency fees, caution fees, service charges, and agreements. According to the law, they are expected to charge just 10 per cent of the house rent but they charge more, according to Oke. “Agency issues need to be addressed,” Oke said. The Nigerian Institution of Estate Surveyors and Valuers “set up the Association of Estate Agents in Nigeria with the aim to regularise the practice of Estate Agency in Nigeria,” but there’s laxity in enforcing the institution’s regulations which makes it easy for the unqualified agents to largely exploit house seekers.
Can The Government Regulate The Housing System in Nigeria?
“Government can be involved in tenancy. The government has the power to regulate anything as long as it is through a law passed by the legislature,” Oke said.
The Nigerian government has implemented various measures to regulate the housing sector and tackle the country’s significant housing deficit, aiming to make housing more accessible. One notable effort is the 1991 National Housing Policy, which was a comprehensive initiative designed to provide affordable housing options for all Nigerians. This policy emphasised the importance of private sector involvement in housing delivery and improved access to mortgages, while also advocating for the construction of low-cost housing. Despite its ambitious goals, the policy faced challenges such as inadequate funding, poor management, and minimal oversight, which hindered its full implementation.
In recent years, the government has also introduced social housing initiatives, especially through the Economic Sustainability Plan launched in 2020. This plan included an ambitious social housing program designed to build 300,000 affordable homes across the country. The program was intended to meet the growing demand for low-cost housing, especially in urban areas. While it is promising in its scope, economic constraints, inflation, and supply chain disruptions, limit its overall impact on the housing market.
Lagos State enacted the Rent Control and Recovery of Residential Premises Law to address excessive rent increases and protect tenants from unjust evictions. While these laws were designed to offer tenants stability and affordability, enforcement has been inconsistent. Landlords in high-demand areas often circumvent the regulations, leading to rent prices that remain out of reach for many residents. For instance, according to law, any landlord who fails to provide a rent payment receipt to their tenant as required under this section shall be liable, upon conviction, to a fine of N100,000 but most landlords don’t even offer receipts.
Issues to Be Addressed
According to Ridwan Oke, more incentives need to apply to private developers. This includes loans and funding, ease of granting approvals for qualified buildings, and ensuring bribes are quashed. Even when you have approval, government officials still mark your structure continuously until you bribe. Land approval also needs to be eased. “In some states, to get C of O takes years,” he said. “In addendum, the government should ensure landlords do not take more than one year’s rent. Lagos has the law but it is never implemented.”
“Also,” Oke continued, “issues of discrimination need to be addressed. Some landlords won’t rent to people from other tribes. Some won’t rent to unmarried women. All these need to be regulated with laws with good sanctions.”
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