Kenya’s middle class and business people have turned to the UK to buy houses for rent out, mostly due to the high inflation in the country, which has made acquiring Real Estate costly and mortgage rates very high.
The initiative is being necessitated by Baron and Cabot, a UK-based Property Company. The company has been helping Kenyans to acquire property in the U.K at low-interest rates.
In June 2022, Kenya’s inflation rose to 7.9 percent from 7.1 percent in May, hitting a 58-month high on soaring prices of food items. This is according to the Kenya National Bureau of Statistics.
This is the first time the upper limit target of the Government, which is 7.5 percent, has been
breached since August 2017.
The disruptions caused by the war in Ukraine has primarily contributed to this. Inflation distorts citizens’ incentive to save, invest ad work.
Buying of property locally has therefore been largely affected. This is due to the rise in prices
for building materials, which consequently make construction expensive. In 2021, economists
at the East Africa Property Summit agreed that Real Estate in the region would be unlikely to
see a rise in demand.
Moses Lutalo, the Managing Director of Broll Uganda, a property service company, lamented that the demand for commercial office space had been down for 12 months, while the demand for rentals remained very low, especially in Kenya.
By May 2022, data by realtor HassConsult showed that the price for an average house within
the city had risen by 6.8 percent. Moreover, land prices in Nairobi rose by a marginal 1.07 percent and recorded a jump of 7.35 percent in the satellite towns such as Kitengela and Juja.
Since it is challenging and costly to buy property in a high inflation market, Kenyans are now finding alternatives to buying property in Kenya.
