Approval for NBS increased mortgage ceiling formally handed over
-housing made more affordable
-Minister Singh
Persons can now borrow up to $15 million from the New Building Society (NBS) for home construction. This comes on the heels of Government staying true to its manifesto promise of making housing more affordable for Guyanese.
Senior Minister in the Office of the President with responsibility for Finance, Hon. Dr. Ashni Singh today formally handed over the approval to Chairman of NBS, Mr. Floyd Mc Donald. The approval will see the ceiling for housing loans increasing from $12 million to $15 million.
Minister Singh says the Government recognises that homeownership is the single most important achievement in almost any family. He noted that the PPP/C Government prior to 2015, has had tremendous success with its housing programme, which has fostered many thriving communities for thousands of families.
“We continue to believe very strongly that homeownership is extremely important at an individual household level, but also at an aggregate economic level. It is for this reason we have developed a comprehensive menu of measures and policies aimed at facilitating homeownership,” Dr. Singh said.
The Minister said since taking office, the Government has actively been addressing housing needs by distributing house lots. He pointed out that from the passing of the 2020 Emergency Budget in September to December 2020, 3800 house lots were distributed. Added to that, several measures, including the removal of value-added tax on construction materials were also announced in both budgets presented by Government.
Minister Singh said the Government through its measures, aims to enable every young person to become a homeowner.
“We would like to get to a point where every young Guyanese family, every young Guyanese person, is in a position where they are able to apply for and obtain a plot of land, where they are able to go into a financial institution and get a loan to be able to build a home, where they are gainfully engaged in economic activity so that they can service that loan and that is where we are aiming to get to,” the Finance Minister said.
Highlighting some facts, Minister Singh said in 1992, the interest rate for housing loans at the NBS was 18 per cent. Additionally, in 1991, the NBS approved a mere 125 new loans. However, in 2012, 1,224 new loans were given and 896 in 2014. He said the economy was responding to the policy environment created by the PPP/C Government. However, in 2020, the NBS only gave 400 new loans.
Dr. Singh said with the increase in the loan ceiling, if 1000 persons take an average of $10 million, it translates to $10 billion being pumped into the economy through the construction sector and 5000 persons being employed.
“We recognise how important homeownership is to the individual family but we also recognise how important homeownership and home construction and construction activity is to the economy as a whole,” Minister Singh added.
Minister Singh also noted that next week, the Government would be signing another agreement with another financial institution to participate in its low-income housing programme for the first time.
Meanwhile, Minister of Housing and Water, Hon. Collin Croal said measures announced in both budgets encourage greater homeownership.
“This signals from Government, our deep, underlying intention of ensuring that we bring greater relief to homeowners, potential borrowers but also walking the walk,” he said.
The Minister said next Tuesday the Ministry would be singing contracts valued billions of dollars for infrastructural works in new areas for housing.
“Potentially within another six months, you have about 8000 persons who can and who may be approaching you for mortgage,” the Minister said.
Additionally, the NBS Chairman said the entity has approved a reduction in its mortgage rates effective April 1, 2021. Low-income loans up to $6 million will attract an interest rate of 4 per cent per annum from 4.25 per cent. The interest rate for loans from $6 million to $12 million has decreased from 6.15 per cent and 6.75 percent to 5.95 per cent. Loans between $12 million and $15 million will attract in an interest rate of 6.25 per cent. He said it will put into the pockets of mortgage holders $100 million per annum.
“The NBS commits itself as an active partner to support the enhanced housing drive and deliver finance to thousands of Guyanese who will be the beneficiaries of the Government’s programme,” Mr. McDonald said.
Minister with the Ministry of Housing and Water, Hon. Susan Rodrigues also attended the function.
In two consecutive budgets, the Government has implemented measures aimed at making housing more affordable for Guyanese. The measures fall in line with the Government’s aim to distribute 50,000 house lots with a target of 10,000 lots per year.