High rate of defaulting tenants have raised concerns among property lawyers and real estate experts who claim that many home renters can no longer cope with the rent inflation. NATIONAL ECONOMY learnt.
They equally noted that the reactionary pricing of rents shows no sign of resilience in the economy which points to the ongoing pressure in the rental market structure.
Property lawyer and facility management experts also revealed that, nearly 90 per cent of landlords in the residential housing sector have increased rents in the past year and over a third are planning to increase rent before Christmas.
These renters, they said, are finding their disposable income squeezed compared to their homeowner peers, resulting in a loss of confidence to acquire their own properties
Further findings revealed that Property costs are disproportionately eating deep into incomes of renters’ take-home pay, whereas homeowners report spending just over a quarter (26.6%) of their earnings on their mortgage.
In addition to this, homeowners face additional costs such as renovations cost, maintenance, skyrocketing utility bills, service charges and certain bills beyond their income levels.
For landlords to recoup rent turnover amidst the high rate of default, real estate expert and the chairman of Association of Capital Markets Valuers (ACMV), Mr. Chudi Ubosi, affirmed that the economy is taking its toll on businesses & in effect tenants both residential & commercial property owners leading to quite number of defaults.
Ubosi said the first thing is communication with your tenant, adding that there must be an ability to show understanding from the landlords side before pulling out or engaging in legal action or whatever.
He advised that due to the slow nature of the nation’s legal system and the ability of litigants to take advantage of a rent free period of 6 months/ 12 months, and so on, to vacate a property, landlords can agree with the tenants on this and other subtle ways of settling their disputes, instead og approaching the court, hence, proplonging the process.
He asserted that, it is better to loose 12 months rent than to stay in court for 4 years or more adjudicating as this can be mutually agreed and signed off on both parties – Landlord & tenant.
Other options he highlighted include; reduction in rents to ensure the tenant stays or can pay, effective communication with the tenant and that, most times, the line of action to be adopted can best be determined only after a seat down and this is why communication by both parties is very important.
Also speaking, CEO of Greenchell Homes, Ezekiel Oke noted that, the review of rent by landlords have caused reactionary pricing, with tenants renegotiating the new rent bid while some tenants are planning to look for cheaper accomodations that will stabilize with their income.
He noted that, the skyrocketing rent effects point to the ongoing pressures in the rental market, alongside signs of no resilience in the economy. He affirmed that, while some landlords appear to be approaching rent increases cautiously, the data suggests rental prices remain in upward pressure, with over 90 percent of landlords arbitrarily increasing rents.
A Landlord in Lagos, Mr. Gbenga Oremeji who spoke to LEADERSHIP correspondent said, landlords continue to play a pivotal role in meeting housing demand across the country, adding that, survey shows that most landlords are taking a measured approach to rent increases despite ongoing pressures.
He revealed that, many are raising rents, but they are doing so cautiously, balancing inflationary pressures with tenant stability while noting that, landlords are carefully monitoring the potential impact of regulatory change.
“This latest data gives a clearer picture of how landlords are responding on the ground, not just in terms of pricing, but how they’re thinking about stability, regulation and future plans,” he noted.
