The impact of housing finance policies on the right to adequate housing of those living in poverty 2012, para. 22
Paragraph- Paragraph text
- Market-based housing finance inevitably targets the more affluent segments of society, which have the necessary capital to take on the initial housing loan and generate profit to lenders through the payment of interest. Mortgage finance has been traditionally considered unattainable for the poor owing to issues such as lack of title, informal and illegal settlements, restrictive zoning and occupancy regulations, low and erratic income and large-scale employment in the informal sector. Banks traditionally focus their marketing on the upper-income groups, tending to adopt an over-collateralized approach to lending (multiple guarantors, low loan-to-value ratio, etc.), which inherently excludes low-income groups. Mortgage markets, therefore, in effect discriminate against low-income borrowers. Research commissioned by the FinMark Trust in 12 countries across Africa found that less than 10 per cent of local populations are eligible for mortgage finance. In Eastern European countries in transition, recent estimates by UN-Habitat indicate that rapid house price increases coupled with high unemployment and higher interest rates on mortgages have excluded more than 80 per cent of new households from the new housing construction market.
- Legal status
- Non-negotiated soft law
- Body
- Special Rapporteur on adequate housing as a component of the right to an adequate standard of living
- Document type
- Special Procedures' report
- Means of adoption
- N.A.
- Topic(s)
- Governance & Rule of Law
- Poverty
- Person(s) affected
- N.A.
- Year
- 2012
- Paragraph type
- Other
- Reference
- SR Housing, Report to the UNGA (2012), A/67/286, para. 22.
- Paragraph number
- 22
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