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High house rent killing middle income earners in Ghana

For most people on low incomes, finding an affordable place to rent is impossible.

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When we talk about housing affordability the most common discussion is about the cost of buying a house. And yet for 90% of people, while buying a house may be an ambition, the more immediate housing affordability issue is affording to pay rent rather than the mortgage.

Many tenants are happy with their home, landlord or letting agent.

But others, including those on middle or  low incomes, are experiencing problems with a significant impact on their lives.

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In Ghana, middle income earners refer to persons who earn an income from GH₵700 to GH₵1200 (GLSS, 2008). These people in accordance with the 2010 population census conducted in Ghana constitute 60% of the total population in the country they include the trained teachers, nurses, farmers, fire services personnel and young graduates.

Many low income households may have little choice over which property to rent because of the budget they have available.

The average expenditure on housing in Accra is much higher than that of similar expenditures in other cities, yet the housing quality in Accra is nothing to write home about.

According to a 2014 report by the Rent Control and Housing Studies, 75% of Ghanaians are spending at least half of their monthly income on housing alone. However, expects say it is not advisable to spend over 30% of take-home pay on housing. City dwellers are the most likely to fall into this trap.

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In the city of Accra, the average rent an accommodation seeker is likely to pay for a single room hovers around GHC 150.while a self-contained chamber-and-hall is between GHC300 and GHC1200 depending on the location of the facility.

The bigger the property the more expensive it is, but that is without the Agency Commission of 10% charged on every successful service, calculated on the number of years agreed.

The Rent Control Department says that is an offence. But the Agents argue that a 5% commission is too meager.

Not only are the costs high, payment form is one onerous. It is not unusual for renters to ask for two years advance payment upfront before releasing the facility to rent seekers who account for two-thirds of all households in the city.

The flourishing real estate market dominated by agents who charge exorbitant fees to connect clients to home owners have not made matters any better.

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It takes a long time before one can find a decent accommodation in the capital and the process is not devoid of agents who charge exorbitant prices.

Pulse Business spoke to some middle income earners and their responses were very interesting.

Michale Boafo is a fresh graduate who earns within the middle income salary range. According to him, although he left school about a year ago, he has not been able to secure an accommodation in town due to the huge advance demanded by landlords. He tells Pulse Business that ,although Ghana Rent Control mandate landlords to charge a minimum of six months, landlords request for two years advance from him which he has not been able to make since he completed university.

This situation Michael says has made him perch on his university campus until he makes some good money for rent.

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Some aggrieved clients who spoke to Pulse Business said the agents charge up to about GHC50.00 for every house they take a client to and 10 percent of the total rent advance paid if the deal went through.

The agents refuse a tour if this amount is not paid or an agreement is not reached for the client to pay the money after the tour.

Others also blamed home owners or landlords who refuse to deal with prospective clients unless it is through an agent.

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