Firm’s ‘pay rent, own home’ model shakes up Kenyan Market

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We have heard the reports and seen the numbers, and it has become increasingly clear that owning a home in Kenya is not for the masses. In fact, a report last week put the average mortgage loan at Sh8.3 million, with the average interest rate at 17.1 per cent. This means to take up a home loan, you would need to make repayments of about Sh122,000 a month — an amount few Kenyans can afford.

Simple Homes, a real estate firm, has taken note of the millions of people looking to buy a home who are not able to afford it, and has decided to do something about it.

The firm, which was set up in October last year, wants to make it possible for people to own homes at the price they pay in rent.

It believes its concept, which is premised on Islamic principles, will revolutionise the property market. But convincing the market with the rosy offer has not been easy.

On its various social media platforms, Simple Homes has faced accusations of being too good to be true.

One critic says she paid the registration fees for a process that was to take 48 hours, but ended up going on for more than a month.

“We checked and the lady who made this particular complaint does not exist in our database. Our biggest detractors have been real estate agents, who feel we are taking business away from them,” the firm told this writer.


The company’s model brings together real estate developers who are unable to secure a bank loan because they cannot sell enough units off-plan; renters who are unable to afford a mortgage; and investors looking for a return from the property sector.

“Our solution responds to the direction the market has taken. The problem in real estate is a finance one and is related to the structure and availability of credit. If people are not financed to own their own homes, then the supply of houses will never meet the demand,” says Dalida Shah, Simple Homes’ director for sales, advertising and marketing.

The firm’s plan of attack is through Home Purchase Plans (HPPs) that allow those shopping for houses to tailor repayments to their incomes and current rent.

For instance, if you pay Sh24,000 in rent, the firm says it can find you a plan that fits within this amount. “At Sh24,000, we can get you into a house that costs Sh6 million, which you can pay for over a period of 20 years,” says Ms Shah, adding that the cost of the house will not change over the repayment period.

But there are a couple of things that need to happen first. Simple Homes is split into two subsidiaries: A co-operative and a developers’ consortium.

The co-operative enables members to access financing, again premised on Islamic principles. The consortium, on the other hand, links property developers to potential home buyers and capital for construction.

To buy a house from Simple Homes, you first have to be a member of the co-operative, and then take up an HPP that details the value of the house you want, what you are able to save every month and the repayment period you want.


The firm offers repayment periods of between five and 40 years. Once you have saved five per cent of the value of the house, you can move in.

“Many property developers don’t like our terms and are not used to our model, but most have no choice. They have huge debts and low sales. Many this year will lose their projects to banks if they don’t address the problem,” Shah says.

“We have a progressive middle-class of about four million households that, under the right financing structure, should be able to own homes,” says Shah, who used to be a manager at Qatar Airways.

Property developers pay upwards of Sh2.5 million to become Simple Homes partner developers. Among the firm’s other revenue sources are members’ joining fees and construction commissions.

It has also entered into a partnership with two property developers from Dubai, which has boosted the firm’s financial muscle. Simple Homes plans to roll out 79 housing projects by December, which would add Eldoret and Nakuru to its developments in Nairobi, Kitengela, Mombasa and Kisumu.

“We have struck a chord with our model. People can now see a clear path to home ownership. They understand it will still take patience, sacrifice and planning, but they know home ownership is no longer a pipe dream,” says Shah.



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