SA Home Loans, South Africa’s largest non-bank specialist home loan provider, has entered the affordable housing market, a development that spells welcome news for house hunters earning less than R18 000 per month.
Penwarden says affordable housing is a major segment of the SA housing market, with properties valued between R250 000 and R500 000 making up more than a quarter of all registered residential properties.
SA Home Loans Chief Executive Kevin Penwarden says now, lower income earners have access to the same innovative, consumer friendly approach to mortgage lending that's helped more than 150 000 individuals and families purchase their own homes.
He says affordable housing is a major segment of the South African housing market, with properties valued between R250 000 and R500 000 making up more than a quarter of all registered residential properties.
Despite this, there remains a massive shortage of decent affordable housing, he says. "This demand has not been matched by a similar appetite in the provision of end-user finance by home loan providers, so we're confident that our entry improves not only the scope, but also the quality of choice available to lower income buyers.”
Mindful of the fact that many lower income buyers find it extremely difficult to save up for the large deposits required for many mortgages, SA Home Loans is offering 100 percent loans to qualifying customers, with a 20 year term variable interest rate loan.
It has also reduced its minimum property size to take into account smaller properties.
Penwarden acknowledged that affordable housing has carried a stigma of higher risk, making fundraising a challenging exercise. “We have leveraged our fund raising expertise and managed to secure sufficient funding to make us a sizeable player in the affordable housing space."
More importantly, he says their funding structure ensures that they will be in this market for the long term.
“Our competitors make much of the fact that providing loans for affordable housing plays a crucial role in nation-building by allowing more of our citizens to get onto the property ownership ladder.
“We take this as a given and aim to treat them as we would any other customer."
Penwarden says their research and experience has shown that home buyers, whether they're in the market for a R250 000 starter house or a R5 million home, want to be treated with openness, friendliness and respect.
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