Cost of Financing on Affordability of Housing in Nakuru East and Nakuru West Sub-counties, Nakuru County, Kenya

Abstract

Access to affordable and decent housing remains a dream to many households, especially in developing nations. In Kenya, the housing need has been identified as one of the most agent area that needs attention. In fact, the government has put affordable housing as one of the big four agenda for the Nation. This study examined the relationship between cost of financing and affordability of housing in Nakuru East and Nakuru West Sub-Counties. Data was collected from 384 households sampled from the 11 wards in the two sub-counties. Stratified random sampling was used to ensure adequate representation of every ward in the sample. Data was collected through self-administered structured questionnaires and interviews. A pilot test was conducted prior to the actual study, incorporating reliability and validly tests. The study achieved a response rate of more than 87%. Findings from analysis revealed that cost of finance is significant determinant of affordability of housing. The study recommends that the government and other stakeholders in the housing sector should consider subsidizing cost of building materials, land, and cost of professional services, mortgage facilities as well as water and electricity. The government can partner with financial institutions as well as private investment organizations to offer more affordable housing solutions to the general public.