For sometime now, this column has been concentrating more on highlighting the main reasons mortgage remains the preserve of only a tiny fraction of Kenyans and suggesting what private banks and mortgage companies can do to make mortgage accessible to the majority of Kenyans without the banks losing out in the process.

Today I want to play devil’s advocate and focus on the flip side of the mortgage debate.

First, perhaps a brief background would be in order. A few decades ago, financing housing was largely a government business, with policies placing emphasis on the government undertaking responsibility for her citizens, from planning to maintenance of housing estates.

Government involvement in the sector could be seen from the different public housing finance interventions and institutional set-ups, some of which have evolved to give way to private- and community-led initiatives.

But in the face of rapidly increasing demand for affordable housing coupled with declining budget allocations, the government’s role has shifted from that of a provider to an enabler, working in partnership with key actors in the private sector.

This has led to increased involvement of the private sector, which is now the largest producer of housing in the country’s major urban centres.

With this has come the growth of conventional housing finance institutions that apply traditional mortgage finance systems. Unfortunately, these institutions have not served the majority of Kenyans seeking mortgage well.

Their lack of flexibility, partly manifested in their requirement that one must purchase or build complete units, has not made things any better.

To this add the sky-high repayment rates and high property prices and you end up with a deadly cocktail of factors that have dashed the housing dreams of the majority of Kenyans.

But how do you explain the reluctance of some people to take a mortgage even when they meet all the requirements? Take the case of Sheila, for instance.

A resident of Rongai, Sheila has for the last few years been dreaming of owning a home. As the chief executive of a Nairobi-based safety NGO, she earns a salary that is enough to enable her secure a mortgage. Her husband also takes home a not-so-bad amount of money from his military job.

But she won’t just buy the idea of taking a mortgage yet. “I don’t want a debt that would tie me down for so many years. I would rather save for my dream home,” she says.

Hers is not an isolated case of mortgage-apathy. Like Sheila, there are very many mortgage- or debt-averse Kenyans out there.

The fear to take a mortgage by some people — even those who can afford — is mainly caused by the long-term nature of these financing options.

Because they can’t quite predict what the future holds for them, many people fear taking a loan that would tie them down for 20 or 25 years.

Maybe they will no longer be active economically, and therefore will not able to service the loan. Worse still, they will not be alive.

But in all these fears a golden opportunity is being lost. A mortgage is not just a loan but a stable form of investment, especially at this time when real estate is big business.

Because of increases in property values, real estate offers capital appreciation, which is obviously beneficial to the mortgage-taker.

Consider this: In 2007, Elizabeth bought a three bedroom apartment with an en suite master bedroom in Embakasi off-plan at Sh3.5 million.

She paid a 20 per cent deposit when the construction began. By the time the project was nearing completion in 2009, she, together with her husband, had raised over 50 per cent of the money from their own sources. She paid the balance (30 per cent) through employer mortgage scheme.

Those who were buying similar units in the same project when it was completed were charged almost double at Sh6.5 million. If she was to sell her unit, she would be able to recover her Sh3.5 million and pocket a cool Sh3 million in capital gains (profits).

As much as it might not sound pleasant to the ears, rapid rise in property prices renders saving to buy a property a poor option in Kenya today.

The truth is that if you are saving, you might not keep up with the rise in prices. If you can afford it, you would rather go for a mortgage.

Look at it this way: Apartment blocks that were going for about Sh5 million in Kilimani in 2005 are now costing about Sh13 million.

That means that if you took a Sh5 million mortgage then and bought the property, you could sell it at the current going price of Sh13 million, thus gaining from the capital appreciation.

And what is more, you can use capital appreciation to move up the property ladder. If you bought a house today then two years down the line you feel that you don’t want it, you are allowed to sell it.

That means you could buy a house in Buru Buru, sell it; take a mortgage and buy another house in South C.

You could stay in the South C house for three years, and then take another mortgage, sell it at a higher price and then move to Kilimani.

You are able to upgrade! It is true that one of the major reasons many “eligible” people hesitate to take mortgages is the fear of losing their property to auctioneers should they default maybe due to loss of job, sickness or even in case of death.

But there should be no cause for alarm since mortgages are usually insured. That means that in case of death, the property and title is given to your next of kin — even if you had not completed repaying the loan.

That partly explains why we don’t see many property auctions nowadays. A number of people who can no longer service their loans take the option of selling the property.

They clear the balance from the sales proceeds and pocket whatever remains on top. Think about it