Study: Most households unable to pay rent in May

Friday, July 10th, 2020 00:00 |
Apartment buildings with shared amenities. PD/Courtesy

Lewis Njoka @LewisNjoka

A third of Kenyans could not meet their rent obligations in May as the economic fallout from the Covid-19 accelerated.

A survey by Kenya National Bureau of Statistics (KNBS) published Thursday says Kenyans who would otherwise pay rent on time but were unable due to the Covid-19 shocks surged by seven per cent from 30.5 per cent in April.

Most of those interviewed fingered reduced income as the reason behind their monthly rent arrears.

“Respondents who reported that they were unable or would not be able to pay or not fully paid the rent for May 2020, were asked to give their main reason for not being able to do so.

Most of the households that were unable to pay rent for May attributed it to reduced income/earning (61 per cent),” reads the report in part.  

Job layoffs

Temporary layoffs and closure of businesses, delayed income and permanent job layoffs stood at 25.7, 8.1 percent and 3.5 percent respectively as reasons behind the late payment of rent.

During that period, landlords were less considerate to the financial uncertainties as the rate of relief decreased from 8.7 per cent in April to 6.7 per cent as they started getting tougher amid the pandemic.

Only 0.7 per cent of tenants received full rent waivers while a further 6 percent of landlords issued temporarily relief.

Moreover, only 31.6 per cent of Kenyans were able to meet their rent obligations in May on time as a further 23 per cent paid rent but not in full.

Only a mere 8.6 per cent of Kenyans had scheduled rent payments on time.

A majority 33 per cent of Kenyans lacked in a coping mechanism to tackle the inability to pay rent while 26.9 per cent of respondents pushed for the renegotiation of rental terms.

A further 14.5 per cent of respondents managed to successfully defer rent payments to a later date.

With the recent easing of Covid-19 containment measures, the country is likely to witness an increase in economic activity resulting in increased circulation of money and improved rent payment.

Allowing movement

On Monday, President Uhuru Kenyatta announced the lifting of the cessation order allowing movement in and out of Nairobi, Mombasa and Mandera.

As per Monday’s presidential announcement, local air travel will resume on July 15 while international travel will resume on August 1. 

The move comes as a huge relief to the local tourism and travel industry which has been hit hard by the Covid-19 pandemic. 

Cessation of movement into and out of Nairobi and Mombasa had seen some matatu owners convert their cars into mobile shops to make ends meet.

However, Uhuru warned that restrictions would be put back into place should the health trend become worrying. 

“In the next 21 days, we shall study patterns of interactions and the spread of the disease.  Any trends that signal a worsening of the pandemic, we will have no choice but to return to the lock-down at zero-option,” said Uhuru.

The planned resumption of worship activities will also help reinvigorate the economy as faithful tithe and bank their weekly collections.

The survey was carried out in June and involved 14,616 respondents. 

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