Proposals for implementing a rent-to-own scheme
Loosen Up Mortgage Restrictions: Innovative Proposals from Deputy Erbolat Sattybaldin
In a bid to address one of the major social issues for Kazakhstani citizens - affording a home - Deputy Erbolat Sattybaldin of the AMANAT faction in the Mazhilis of the Parliament of Kazakhstan is pushing for changes. He compared the obstacles in buying a house to the ease of purchasing a car, and it's got him riled up.
Currently, a potential homebuyer needs a hefty 30% initial deposit to qualify for a mortgage, plus they're hit with high-interest rates of 18-20%. In stark contrast, buying a car worth around 30 million tenge requires no initial deposit, has an annual interest rate of just 6%, and online document processing.
"It's alarming that state policies support car purchases while housing, the bedrock of a stable life, lags behind," Erbolat Sattybaldin vented.
To rectify this disparity, he's put forward a series of suggestions:
- Buy Now, Pay Later: Many aspire to own a home, but can't gather the initial deposit. Sattybaldin proposes counting rent payments toward future deposits. For example, if someone pays 200,000 tenge per month, 50,000 would go towards their future deposit. This would help renters save for a home and demonstrate their creditworthiness over three years.
- Streamlined Mortgage Processing: Develop a digital platform for quick, hassle-free mortgage processing similar to car loans, with easy data exchange between government agencies and banks.
- Expand Funding Options for Affordable Housing: Don't limit housing savings systems to just "Basys Bank". Invite other banks to join mortgage lending and develop the long-term financing market to lower interest rates and enhance competition.
- Focused State Support:
State programs should target those truly in need of housing, rather than distributing subsidies for secondary market transactions or investment purposes. Close the gap between housing policy and regional development programs to even out migration patterns and foster comprehensive regional growth.
While specifics about Sattybaldin's proposals aren't widely publicized yet, ongoing initiatives such as government housing subsidies, rent assistance, concessional mortgages, and housing certificate distribution indicate a dedication to addressing housing affordability in Kazakhstan.
- Deputy Erbolat Sattybaldin suggests counting rent payments toward future deposits for a mortgage, aiming to help individuals save for a home and show their creditworthiness over a period of three years, which could be termed as a more lenient approach to personal-finance and business when it comes to homeownership.
- To promote a greater business and finance ecosystem, Sattybaldin proposes establishing a digital platform for swift, convenient mortgage processing similar to car loans, with ease in data exchange between government agencies and banks, which would streamline the process and bring personal-finance options for housing on par with those for vehicle purchases.
