After a High Court judgment prohibited the use of pension funds to acquire residential property, Kenyans would have to dig even deeper into their budgets to buy a house.
The High Court, represented by Justice Anthony Ndung’u, found that the Morgage Loans Amendment Regulations 2020 were invalid.
Parliament was found guilty of not consulting with the people before enacting the measure in a judgment issued on November 23.
He went on to say that the change was made without following the legal procedures that would have been required.
Recent events have the potential to derail the government’s initiative to provide Kenyans with affordable housing options in both urban and rural settings.
In a dispute, the amendment allows members to apply their benefits toward the purchase of a home from a nonprofit organization.
But under the rules, a member may only utilize their benefits to buy a home once.
Notably, on September 14, 2020, Ukur Yatani, then-Treasury Cabinet Secretary, approved the change that was subsequently published in Legal Notice 192 of 2020.
The court has also stopped any further Retirement Benefits Act of 1993 modifications from taking effect.
The Act authorized the retirement benefits sector to increase its contribution to Kenya’s housing shortage.
A strategic strategy was developed by the administration of President William Ruto that would make it possible for Kenyans to own homes with a monthly mortgage of about Ksh6,000. Homeownership was assumed to be a given after a period of 15-25 years.
A one-bedroom unit will cost Ksh6,600 and a two-bedroom unit would cost Ksh10,000, and these prices reflect mortgages, not rent, as Ruto said.