CHAPTER ONE
1.0 INTRODUCTION
Housing problems
in urban centre have often been viewed in term of qualitative and quantitative
inadequacy with or without attention to the problem of increasing rent. As
there are many urban residents struggling to get accommodation, most of them
will have a roof over their heads in rented accommodation. However, the
majority of the low-income earners are not comfortable because of galloping
rent increases.
The problems reached a crisis in the early 1970’s,
which led the federal military government to set up a rent panel to review
among other things, the level and structure rents in urban centre. Various long
and short term recommendations were made and all state governments were
directed to implement them.
Today, the rent
situation has not improved rather it has been further worsened by the equally
sprawling inflation which has tremendously shot-up the cost of building
materials.
This study
therefore aims at examining through empirical investigation the annual trend
and variation in rental values of residential properties in GRA Ilorin, using a
time frame of the past ten years (2003-2012). The study shows the variation and
trend in the property rents which can serve the basis for projection into the
future to aid decision making by investigators, managers and other
stakeholders. It also identifies the causes of rising trend and then recommends
pragmatic solutions
Moreover,
several factors do affect the values of real property, these includes physical
factor, economical, social, political and environmental factors.
Physical factor
is the factor that best describe the physical appearance of a property in terms
of the design and life cycle, availability of certain service such as water,
boiler, electricity, garden and security. The economic factor is based on the
reasonable significant influence of property values in a favorable economic
situation of many activities that trends to yield returns consecutively.
Political
factors are government laws that inference in the public use of land in a way
that will benefit them. Example is the rent control edict.
Environmental
factor simply describes the location of a property, the neighbourhood and
population phenomenal (increase or decrease) which may cause positive or
negative effect to the values of such properties.
Finally, rate of
(increase or decrease) demands for landed properties, ranges from supply of
properties, level of employment, availability of mortgage loans facilities, low
interest rate couple with low tax burdens on property incomes are economic
measures that have great influence on property values.
Social factors
are the role of the socio activities that control human social behavior which
coordinate their mode of interaction and cooperation within the society.
1.1 STATEMENT OF PROBLEM
The creation of
Kwara state led to a claim of economic and administrative actions in , the state
capital. This has given rise to government decision to reserve an area for
government to aid administration. The influx of people into metropolis as a result of the
conferment of capital status has increased demand for residential property.
There is inadequacy/availability of housing stock to accommodate the increasing
population of the town.
The above
situation has given rise to increase in house rent, increase demand for land
and among others
1.2 AIMS AND OBJECTIVES
The aim of this
study is to examine the trends in rental value of residential properties in GRA[TPS
100] ,
with a view to identifying the causes of variation in values of residential
accommodation.
The specific
objectives of the study one:
i.
To identify types of
residential properties in the study area
ii.
To examine the rental
values of residential properties for the past 10 years (2003-2012) in the study
area.
iii.
To examine the causes
of variation or trends in rental values of residential properties in the study
area.
iv.
To examine factors that
affects the rental values of residential properties in the study area and
provides recommendations to the factors.
1.3 SIGNIFICANCE OF THE
STUDY
The significance
of this study are as follows:
–
The study is
significant to Estate Surveyors and Valuers, Town planners, Quantity surveyors
etc. because improved residential property development will enhance their
professional performance
–
To the general public,
there will be enough residential accommodation at their disposal for occupation
at relatively moderate rent of study will be taken and
–
It will assist in the
forecasting of future trend in rental value of residential property and
therefore provide a guide for prospective investors and policy makers
1.4 SCOPE OF THE STUDY
The purview of
this study is specifically restricted to GRA (TPS 100) neighbourhood in , Kwara state in
order to set a proper view of rental value trends of residential properties.
This study covers the trends in rental value of residential properties in the
study area for the past (ten) 1o years (i.e. 2003-2012)
Therefore, the
study further examines the type of residential properties available within the
location.
1.5 LIMITATIONS OF THE
STUDY
The researcher
encountered a lot of problems in the course of this research work. They include
the following
1.
Illiteracy:
this is uncooperative attitude of the respondent during the data collection.
Some landlords thought that I am a government agent that the data collected is
going to be used to tax them.
2.
Lack
of cooperation: Some people bluntly refused to
grant interview or accept the questionnaire and where they accept, the
information supply will be false information. During the process some did not declare the actual rent collected on
their property
3.
Finance:
shortage of finance affects this work in term of transportation to the study
area and typing of the project work.
4.
Secrecy:
some people bluntly refused to grant the questionnaire on the ground that they
did not want to disclose their identity.
5.
Time:
It took a lot of time before this work is completed
6.
Lack of proper and
adequate records on the rental value trends of properties in the study area.
1.6 STUDY AREA
(GEOGRAPHICAL SETTING & HISTORICAL BACKGROUND OF STUDY AREA)
Ilorin
was founded by one Ojo-Isekuse (1600-1700). The name
was derived from Ojo-Isekuse compounds now Oke-lele of . It was on the stone that Ojo Isekuse
used to sharpen his hunting implement e.g. cutlass and arrows hence “” (the sharpen
iron)
Ilorin
is essentially a Yoruba city through people by many ethnic groups such as
Yoruba, Hausa, Fulani, Nupe, Kanuri etc. they all merged together and made the
city a unique melting point of cultures. At the same time they are all proved
of their unique
identity. The ruler of the city and its environs (the
emirate) is of Fulani origin although the royal house had been Yorubanised
thoroughly; those who are far from the city make the mistake of thinking that
the various ethnic groups that fused together to make up are separate and antagonistic towards
one another. The indigenes guard their
cultural heritage jealously.
Ilorin
is located at latitude 80300N and longitude 40350E.
It lies in the plain of the south –western part of . The city which lies along
Lagos-Kaduna highway is 306 kilometers from ,
600 kilometers from and about 500
kilometers from .
The main river
is ; it occupies a fairly wide valley
and flows south-north direction. The river divides
into two parts: western part representing the lore of indigenous area of and the eastern
part representing the area where the government reservation area (GRA) is
located. Towards the north of this western part is an isolated hill; called
Sobi hill. The hill is about three hundred and ninety-four (394) feet high
above the sea level.
Ilorin
was a tropical wet and dry climate. It has mean annual rainfall of about
1318mm, which begins in April and ends in November. It has a population of
about 742,090 people.
The area of
study in this project is the government Reservation Area (GRA). GRA is an
extensive area to the North-eastern part of . It was acquired for government use by
the old colonial administration in the early part of the 20th
century. Government offices and
scattered residential houses were constructed there. Many of the British
colonial officers and their
counterpart lived in the area. At independence in 1960, many more moved
into the GRA and later large plots of land area were allocated to the elite
class and they built their houses there. Some also rented out their premises to
tenants.
1.7 DEFINITION
·
Agent:
one who acts on behalf of another; a person appointed to conduct the affairs of
a principal. (Champman D. H. 2002)
·
Auction:
to sell by means of increasing bids, the highest bidder becoming the purchaser.
(according to above name]
·
Auctioneer:
one who conducts a sales by auction and who, despite received folks lore never
says “going, going, gone”. (according to above name)
·
Authority:
a body or person given legal power to carryout certain specified tasks, such as
local authority, highway authority. (according to above name)
·
Covenant:
a clause in a lease etc. whereby a party binds himself to do or not to do
certain thing. (according to above name)
·
Estate:
despite its common meaning of an area of landed property but in this context,
it is the interest a person holds in land. (Shittu Gbeko T. 2004)
·
Landlord:
a person, or body of person who grants a lease of land or tenements to a tenant
under a contract of tenancy. (champman D. H. 2002)
·
Lease:
lease is a property transfer arrangement, where the landlord (lessor) transfers
the use and possession rights of his property to the lessee for a definite
period of time in consideration for payment of rent, which can be periodically
or any other period subject to the arrangement between the lessee and the
lessor (Kuye O. 2003)
·
Premium:
a price or reward; hence a capital sum paid by a lessee to a lessor for the
grant of a renewal of a lease on favorable terms. (kuye Olusegun, 2000)
·
Property:
in a wide legal sense, anything that is the subject matter of ownership (Okoh S. O. 2001)
·
Rent:
a periodic payment usually in money, although it may be in kind made by a
tenant to a landlord for the use of land, house etc. (Kuye Olusegun 2000)
·
Security:
in investment, an overall term after a stock share, debenture etc. representing
invested cash (Champman D. H. 2002)
·
Surrender:
an agreement whereby a tenant yields up his tenancy to his landlord before the
term is expired (Oyiboka E. 2000)
·
Tenant:
a person, or body of persons, who holds trends or tenements from a landlord in
lease hold tenure (Champman D. H. 2002)
·
Valuer:one who values all types of property
for purchase, sale, letting investment, rating and other purpose. (Kuye O.
2000)
Values
:
value is the highest price estimated in terms of money which a property would
bring if exposed for sale in the open market allowing a reasonable time to find
a purchaser who buys with the knowledge of all the uses to which it is adopted
and for which it is capable of being used. (Kuye O. 2000)