Kenya Mortgage Refinance Company CEO Johnstone Oltetia during a past interview. [File, Standard]
The Director, Credit and Operations at Shelter Afrique Development Bank, Chris Chege, tabled an interesting proposal at the just concluded Kenya Mortgage Refinance Company (KMRC) Affordable Housing Conference 2025.
That, maybe, it is time Kenya develops a policy on the issuance of temporary titles. Such titles could be issued by developers, or the initial owners of the project – and will be legal so that financial institutions can accept.
The reasoning behind this proposal is the agony developers go through to sell their units after completion.
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“If you do a development in Kenya, and we are talking about 24 to 36 months, it’s going to take you at least 18 months to offload the entity into the market,” he argued.
And in those 18 months, considering the cost of money (interest rate), which is about 15 or 20 per cent, the developer is stuck with the project for months, unable to offload because of processes, such as titling, that are involved.
“Why can’t the government move and have what we can call a temporary title, which is going to allow the banks to take over, and then the titles are issued thereafter?” he posed.
He explained: “What this means is, we use it like a buy back guarantee, in which case that the head title is allowed to issue titles to people, meaning the developer can finish a house today and hand over everything, then be left registering full titles as we go along.”
This long period between project completion and selling is also documented in the Real Estate Survey Report 2023/2024 by the Kenya National Bureau of Statistics (KNBS). The report notes that residential properties that were sold in 2023 took an average of 16 months from the time they were advertised or put on offer for sale and the time they were sold off, known as offtake.
It further indicates that two-bedroom town houses and three bedroomed bungalows took the least time, at six months and eight months, respectively. On the other hand, three- and two-bedroom apartments took the longest time, at 19 months and 18 months, respectively.
Overall change
“The results also reveal that generally, a longer off-take time tends to reduce the actual sale price of the property. For example, properties whose off-take time was twelve months or more fetched lower sale prices compared to the advertised prices except for one and two-bedroom apartments,” says KNBS report.
KMRC Managing Director and Chief Executive Johnstone Oltetia said if digitisation of land records is done, temporary titles will not be necessary.
“When you have digitisation done, you improve efficiency, there might not be any need to issue temporary titles. I think it is an initial step if that cannot be achieved immediately,” he said.
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But for there to be change in the whole sector, Lucy Owano, Affordable Housing Project Manager, FSD-Kenya, says counties also need to digitise their records.
“Most counties are still trying to set up their digital systems but we have some that are still doing manual systems,” she said. Owano argues that digitising land records for counties will also boost their own source revenue.
Owano references the progress Rwanda has made, which has not only digitised land records but also has templates of building plans that developers can adopt removing complexities involved when seeking approvals.
“They (Rwanda) have pre-approved plans, for example, if you want to build using specific plans that are already pre-approved by Rwanda Housing Authority, then you can consider it approved,” she said. Lands, Public Works, Housing and Urban Development Cabinet Secretary Alice Wahome, while addressing attendants at the conference, said the government’s goal is to establish a unified, secure, and modern land administration system.
She said ground work is being laid across the 47 counties. “This makes high-density housing viable for banks, developers and home owners alike,” she said.
Owano noted that at policy level, her office is undertaking a comprehensive review to update, harmonise and enact land laws that speak to the challenges the housing sector faces.
“These reforms will deliver, secure land tenure, streamline approvals and searches, improve investor confidence and encourage faster movement of documentation,” said the CS.
She added that the government is laying the legal, digital and institutional foundation of how the land ecosystem will serve every Kenyan. Additionally, her office is in consultation with the National Treasury and the World Bank, to access more funds for the exercise.
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