FG moves to regulate housing sector, proposes licensing for developers, agents

By John Alechenu, Abuja

The Federal Government has unveiled plans to strengthen regulation of Nigeria’s housing and construction sector through measures that include mandatory licensing for property developers and agents, as well as the introduction of escrow accounts to protect home buyers.

The Minister of Housing and Urban Development, Engr. Dr. Muttaqha Darma, disclosed this on Tuesday at the opening of a three-day Stakeholders’ Validation Workshop on the National Housing Data Programme and the Regulation of the Built Environment in Abuja.

According to the minister, the real estate sector contributes about 13.4 per cent of Nigeria’s Gross Domestic Product (GDP), estimated at about N41 trillion. He added that when combined with the construction sector, the industry’s value exceeded N77 trillion last year.

Darma, however, expressed concern over what he described as inadequate regulation of the sector.

“We put regulations in place for banking and got stability. We did the same for telecommunications and moved from less than 500,000 lines to over 200 million. We regulated oil and power. Housing was left out,” he said.

He explained that the draft National Housing and Built Environment Regulation Policy proposes reforms in six key areas, including the licensing of developers and estate agents, compulsory escrow accounts for buyers’ funds, registration of professionals, enforcement of the National Building Code, improved land administration and the establishment of a national housing data centre.

The proposal also recommends the establishment of a National Housing Industry Regulatory Commission to oversee the sector.

Highlighting the importance of regulatory reforms, Darma cited Dubai’s experience, noting that compulsory escrow arrangements contributed to greater confidence in its property market.

He also linked weak regulation to recurring incidents of building collapse, stressing the need for stricter compliance with professional and construction standards.

On housing finance, the minister said about six million Nigerians currently contribute to the National Housing Fund (NHF), with the Federal Mortgage Bank of Nigeria (FMBN) collecting between N120 billion and N150 billion annually.

He noted, however, that mortgage penetration remains low and said the government is proposing a National Mortgage Industry Policy to improve access to housing finance.

According to him, the proposal includes reforms to the FMBN, the establishment of a National Housing Finance Authority, and measures to enable informal sector workers, including traders, artisans and commercial drivers, to participate in the NHF scheme.

He added that the government also plans to introduce a diaspora housing window to encourage greater investment by Nigerians living abroad.

Darma further said the ministry’s technical committee had reviewed available data and estimated Nigeria’s housing deficit at about 15 million units, using data from international development agencies.

He urged stakeholders to scrutinise the methodology during the workshop to ensure that future housing policies are based on reliable data.

The minister acknowledged that the proposed reforms could face opposition from some stakeholders but said the government remained committed to implementing measures that would improve transparency, accountability and investor confidence in the housing sector.

Also speaking, the Permanent Secretary of the Ministry of Housing and Urban Development, Dr. Shuaib Belgore, said participants would review the report of the ministerial task team on building collapse as part of the workshop.

He added that the ministry had developed a framework for a National Housing Data Centre and urged stakeholders to make meaningful contributions to the policy review process.