Vice President, Dr. Mahamadu Bawumia has announced the provision of low-interest loans for young people to rent affordable homes once the incumbent government is reelected into office.
In a statement, he divulged that this will be done through a new scheme known as the National Rental Assistance scheme.
He further intimated that, the scheme which will start off with a seed amount of GH¢100 million from government will be done in partnership with the private sector to raise more capital and relieve a lot of people of the burden of rent.
“While we continue to pursue long-term solutions to the development of the housing market, to address, in our second term, the short-to-medium term market failures in the renter-segment of the housing market, we will establish a National Rental Assistance Scheme (NRAS). In partnership with the private sector, the Scheme will provide low-interest loans to eligible Ghanaians to enable them pay rent advance.
“There are lots of young people who when they finish school, to rent accommodation is a big problem especially because of the demand for rent allowance which is sometimes up to two years demand. But someone who just finished school and is starting a job doesn’t have that savings to pay all these huge demands for rent allowance. This shows a market failure because of what the tenants and the landlords want. This is why the government has decided to come up with this to bridge this market failure by setting up a National Rental Assistance Scheme,” he said.
Dr. Bawumia
In furtherance, Dr. Bawumia stressed on the fact that that the scheme will predominantly cater for individuals in formal employment and will be required to provide guarantors to access the support from the scheme.
“The Scheme will target individuals (both in the formal and informal sectors) with identifiable and regular income. The rent advance loans will be paid directly into the bank accounts of landlords, who would have to register with the Scheme. Under this scheme, if you have a job and we can deduct regularly from your income under this scheme, the National rent assurance scheme will give you a loan to pay your rent allowance but it is to the landlord. You need to have formal employment.”
Dr. Bawumia also iterated that government will also focus on providing low income housing for low income earners.
“As part of our interventions, we will also implement the necessary regulatory, institutional, and operational reforms of the Rent Control Department, including the digitization of its operations, to enhance delivery and make it better able to serve the changing needs of market players, including landlords and tenants. A new Rent Control Act has been drafted for review by Cabinet in this direction,” he stated.
