Assessing the role of Housing Finance Institutions in the transition to home ownership for middle income earners : Case study in Kampala City

Abstract

There is a steady increase in the population Kampala City and this population needs shelter. The average annual population growth rate is much faster than the housing that is being constructed. As a result there is an increase in the cost of renting the available houses since demand is high. With background, it also shows that a larger percentage of the population is still renting and there is need to identify ways of increasing the home owners in Kampala City. The main objective of the study was to identify how the housing finance institutions facilitate the transition of middle income earners to home ownership in Kampala city. A sample size of 50 respondents was selected using random sampling methods. Data was collected using questionnaires and analyzed using mixed methods. Findings revealed 85% of the respondents qualified to acquire mortgages but only 27% would take on the mortgage as a source of financing to transition to home ownership. The findings further revealed that 67% of the respondent would prefer to us other form of financing like through savings, attaining money from salary/business earnings or attaining a loan from other sources. Based on these findings, some conclusions were made. The middle income earners who qualify for a loan are many although they are unwilling to take on the mortgages as a source of financing for transition to home ownership. This shows that there’s need for housing finance institutions to review their services and encourage enable more middle income earners to opt for mortgages. With this it shows that Uganda is struggling to overcome the housing deficit using housing finance.