TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers profound insights into Kenyan and global economic trends.

President William Ruto's Cabinet has approved the reduction of the deposit required to buy a home built under the Affordable Housing Programme by half.

Buyers will now pay a deposit of 5% of the unit value, down from the current 10%.

The country's top decision-making organ approved the Affordable Housing Regulations, 2024, during its Tuesday, June 24, meeting at the State House, Nairobi.

In a statement, the Cabinet noted that the regulations are crucial pillars of the Bottom-Up Economic Transformation Agenda (BETA) to facilitate simple and fair access to home ownership.

"Reducing the minimum housing deposit from 10% to 5% is a significant aspect of the laws that lowers the entry barrier for those with low and moderate incomes. A fair distribution of housing among income brackets, access to house loans with low interest rates or low monthly payments, and structured deposit support for individuals who are unable to make upfront payments are some further considerations," it stated.

State House explained that the regulations would also guide the development, design, and maintenance of affordable and institutional housing in all counties.

Furthermore, they shall promote long-term financing solutions for both development and purchasing, while also allocating funds for maintenance and essential services within housing projects.

On Thursday, June 19, reported that the Kenyan government stated that all salaried workers contributing to the Affordable Housing Levy will be given priority in the allocation of affordable homes.

However, those eligible under the social housing category would be excluded.

This decision followed a meeting between President William Ruto and COTU Secretary-General Francis Atwoli.

The public outcry regarding the diversion of the Housing Levy to fund the construction of markets, schools, and other infrastructure led Ruto to call the meeting.

According to Atwoli, the president assured that no additional markets would be built using the levy.

However, the 400 markets currently under construction will be completed.

A special committee will be established by the Affordable Housing Board to oversee the implementation and proper scope of the market development programme.

In other news, Treasury CS John Mbadi announced plans to exempt low-income Kenyans from the 1.5% Housing Levy.

This follows a World Bank recommendation to the Kenyan government in its 2025 Public Finance Review.

Due to the rising cost of living, many Kenyans have consistently expressed dissatisfaction with the deductions on their payslips.

According to Ruto, contributors to the levy will now qualify for affordable home loans of up to KSh 5 million, with single-digit interest rates.

Source: TUKO.co.ke