Real estate firm Costa Homes in collaboration with the National Bank of Kenya (NBK), has launched a new savings account that will shield buyers funds from developers in off-plan transactions.
In the new arrangement, buyers’ funds will be held in the account until their completed units are delivered before developers can access the money.
“We are giving assurances to Kenyans and even our diaspora community that you can buy houses off-plan with your monies securely held until the developer delivers your housing unit,” NBK managing director Paul Russo said.
He said the savings plan seeks to protect home buyers from developers who rely on pre-sale funds to complete development projects where some have failed to deliver the units as agreed, resulting in losses to home buyers.
According to Russo, the product will help restore confidence in off-plan arrangements as it will weed out fraudulent developers. The plan also gives off-plan buyers access to mortgages, accelerating their homeownership.
“Once you occupy a house that belongs to you means it will be much easier to service the mortgage using money previously spent on paying rent,” he said.
Last week, the Kenya Mortgage Refinancing Company (KMRC) said it plans to use the rent to own plan make it easier for buyers to pay-off their mortgages.
Costa Homes has partnered with financial services firm Octagon Africa, who have a client base of 90,000 for the housing projects it is undertaking across the country.