Housing Finance in Lesotho
Overview
This profile is also available in French here.
To download a pdf version of the full 2023 Lesotho country profile, click here.
Lesotho is a 30 588 km2 landlocked country bordered by South Africa.Lesotho had 2,159,067 inhabitants in 2021, with an annual growth rate of 0.78%. The urban population grows by 2.3% every year, while over 70% of urban expansion is informal due to private property subdivision. There is a scarcity of serviced land and transportation infrastructure in the affordable housing industry.
Agriculture, mining, and construction are expected to benefit from the Lesotho Highlands Project II (LHWP-II), the Mafeteng Ha Ramarothole Solar Photovoltaic (PV) Park, and the construction of the Maseru district hospital. COVID-19 is expected to reduce real GDP by 6.5 percent in 2020 and 1.0% in 2021.In 2021, the average annual inflation rate was 6.0%. Despite the expected economic recovery in 2021, poverty remains at 30.1%. More than half of the national budget is funded by South Africa.
Non-performing loans accounted for 3.3% of Lesotho’s gross loans in 2019 and 4.1% by 2021. Outstanding household mortgages stood at M23 515 899.70 (US$1 432 900.25) in 2022. There are 125 non-mortgage lenders. In 2012, Lesana Lesotho began selling mortgages. Lesana provides unsecured incremental loans for housebuilding to low- and middle-income government, state-owned, and commercial sector employees. Direct salary deductions, as agreed upon with employers, are used to reduce the risk of unsecured loans. Loan terms range from 6 to 60 months, with loan amounts ranging from M1,000 to M250,000.
In 2022, an unserviced urban residential plot in the capital will cost around M119/m2 (USD$7.25). 70% of households earn less than US$61 per month, and the majority of them can only afford an M48, 000 (US$2,925) home, which no bank will finance. According to UN-HABITAT, median household expenditures in Maseru’s major urban areas ranged from M10,000 to M20,000 per year (US$609 to $1,219).
As a result, the incremental microlending industry and microloans could play a significant role in home construction. However, affordable, planned, serviced land in suitable areas is difficult to find, particularly for low-income people. Green housing modules may reduce construction costs while improving thermal comfort for residents.
Find out more information on the housing finance sector of Lesotho, including key stakeholders, important policies and housing affordability:
- Overview
- Access to finance
- Affordability
- Housing supply
- Property markets
- Policy and regulation
- Opportunities
- Availability of Data on Housing Finance
- Green Applications for Affordable Housing
- Websites
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2023 edition, which has up-to-date profiles for 55 African countries.
Download yearbookLesotho
Overview
Lesotho is a small country of some 30 588km,2 and is completely landlocked by the Republic of South Africa. As of 2021 Lesotho had a population of 2 159 067 people, with an estimated annual population growth rate of 0.78%. The largest proportion (70.5%) live in rural mountainous areas, while 29.5% are urbanised in the foothills and lowlands. The urban population is growing at approximately 2.3% per year, and an estimated 54% live in informal areas.[1] Over 70% of urban growth occurs informally through the private subdivision of peri-urban land.[2] The affordable housing sector in Lesotho is constrained by the lack of planned serviced land for affordable housing and supporting road infrastructure.
The World Bank classifies Lesotho as a lower to middle income country, with a Gross Domestic Product (GDP) of M37 billion (US$2.3 billion) and per capita GDP of M17 239 (US$1 050).[3] Real GDP contracted by nearly 6.5% in 2020 as a result of COVID-19, while GDP growth was only 1.0% in 2021. Economic growth is expected to recover to 2.1% during 2022 through to 2024 due to development of agriculture, mining and construction associated with the Lesotho Highlands Project (LHWP-II), the Mafeteng Ha Ramarothole Solar Photovoltaic (PV) Park and the construction of the Maseru district hospital.[4] LHWP-II will include the construction of the Polihali Dam and reservoir, water transfer tunnel and associated infrastructure services.[5] The Polihali Dam will add an additional 2 325 million cubic metres to the LHWP storage capacity and earn significant royalty revenues on the transfer of water to South Africa. At the end of 2021, Lesotho generated M12.545 billion (approximately US$759 million) in revenue from water transfers to South Africa. The LHWP-II project has seen housing being built in the Polihali Village and the upgrading of the Katse Village. Three potential sites have been identified for hydropower as part of the scheme. The existing Muela Hyrdropower Plant has reduced Lesotho’s dependence on imported electricity and has contributed significantly to the country’s GDP.[6] Significant environmental and social impact assessments have been undertaken to extend the project.
Lesotho’s economy is strongly integrated with South Africa, with revenues from the Southern African Customs Union (SACU) financing more than half the national budget. Over 90% of Lesotho’s imports originate from South Africa. Lesotho is also a member of the Common Monetary Area (CMA) with the South African rand being legal tender in the country. Many Basotho find employment in South Africa in mining, manufacturing, agriculture and domestic work.[7] The average annual inflation rate was 6.0% in 2021 compared to 5.0% in the previous year, largely driven by increases in food and energy prices, as well as increased costs of administrative services and increased prices on imported goods. Between January and June 2022, the inflation rate had increased from 7.6% to 8.8%[8] and the lending rate is 8.96%. Despite anticipated economic recovery in 2021, poverty levels have stayed high at 30.1%, a marginal decrease from 30.4% in 2020.[9]
More than 90% of disasters in Lesotho are related to climate change.[10] In Maseru in January 2022, hailstorms, heavy rains and flash floods badly damaged houses, vehicles, infrastructure (especially roads and bridges), schools, health centres and crops.[11] A post-disaster assessment report after previous flash floods in 2011 estimated that between 2 000 and 2 500 houses, most being traditional structures made of mud bricks, were either damaged or destroyed..[12]
The government passed the Disaster Management Act in 1997. The Act facilitated the establishment of National Disaster Management Authority (DMA) and its associated structures, the National Disaster Relief Task Force and Village Disaster Management Teams. The Act provides the framework for the development of a Disaster Management Plan, and various disaster reconstruction, rehabilitation and recovery plans. Since the creation of the DMA the key policies that have been developed include the National Resilience Strategic Framework (2019-2030)[13] and the National Climate Change Policy 2017–2027.[14] All these policies aim to build national resilience to climate change in all vulnerable sectors, including housing.
[1] World Bank Open Data (2018). Population living in slums. https://data.worldbank.org/indicator/EN.POP.SLUM.UR.ZS?locations=LS (Accessed 25 August 2022).
[2] Kingdom of Lesotho (2015). Habitat III National Report 2015. Third United Nations Conference on Housing and Sustainable Urban Development. Ministry of Local Government and Chieftaincy Affairs. https://unhabitat.org/lesotho-urban-housing-profile. https://unhabitat.org/lesotho-urban-housing-profile (Accessed 15 Sept 2022).
[3] World Bank Open Data (2022). GDP per Capita Lesotho. https://data.worldbank.org/indicator/ NY.GDP.PCAP.CN ?locations=LS (Accessed 25 August 2022).
[4] World Bank Open Data (2022). GDP per Capita Lesotho. https://data.worldbank.org/indicator/ NY.GDP.PCAP.CN ?locations=LS. (Accessed 25 August 2022).
[5] Infrastructure News (2022). Lesotho Highlands Water Project – Phase II: An update. https://infrastructurenews.co.za/2022/07/21/lesotho-highlands-water-project-phase-ii-an-update/ (Accessed on 18 September 2022). Pg. 1.
[6] Infrastructure News (2022). Lesotho Highlands Water Project – Phase II: An update. https://infrastructurenews.co.za/2022/07/21/lesotho-highlands-water-project-phase-ii-an-update/ (Accessed on 18 September 2022). Pg. 6.
[7] UN-Habitat (2015) Lesotho Housing Profile. Nairobi: UN-HABITAT. https://unhabitat.org/lesotho-urban-housing-profile (Accessed 15 Sept 2022).
[8] Trading Economics. (2022). Lesotho inflation rate. https://tradingeconomics.com/lesotho/inflation-cpi. (Accessed 25 August 2022).
[9] Ibid.
[10] The World Bank (2021). Climate Risk Country Profile: Lesotho. https://climateknowledgeportal.worldbank.org/sites/default/files/2021-08/15930-WB_Lesotho%20Country%20Profile-WEB.pdf (Accessed 15 Sept 2022).
[11] Lesotho National Resilience Strategic Framework, 2019-2030 (2019). https://drmims.sadc.int/sites/default/files/document/2020-03/Resilienc Lesotho National Resilience Strategic Framework and Theory of Change -160919.pdf. (Accessed 15 Sept 2022). Pg. 13.
[12] Government of Lesotho (2011). Post Disaster Needs Assessment. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/650661468193738792/lesotho-post-disaster-needs-assessment-heavy-rains-2010-11 (Accessed 13 September 2022).
[13] Lesotho National Resilience Strategic Framework, 2019-2030 (2019). https://drmims.sadc.int/sites/default/files/document/2020-03/Resilienc Lesotho National Resilience Strategic Framework and Theory of Change -160919.pdf. (Accessed 15 Sept 2022).
[14] Government of Lesotho (2017). Lesotho Climate Change Policy 2017-2027. Maseru; Ministry of Energy & Meteorology.
Access to finance
Lesotho’s financial sector comprises four commercial banks, First National Bank Lesotho (FNB), Nedbank Lesotho, Standard Lesotho Bank Limited (SLB) and the Lesotho Post Bank (LPB). The first three banks are subsidiaries of South African banks and are the most important providers of mortgage finance. As of 2019, foreign-owned banks controlled approximately 92% of the banking industry’s assets, revenue, and deposits. The LPB is a Lesotho government-owned bank. The financial sector comprises 10 insurance companies, 47 insurance brokers, six stockbrokers, 125 microfinance institutions, two asset management firms and two money transfer institutions.[1] The Central Bank of Lesotho (CBL) is the sole regulator of all the financial institutions in the country.[2]
The Global Findex report shows that 46% of Lesotho’s population over 15 years of age had an account with a formal bank in 2017. Slightly more women (46%) had bank accounts than men (45%).[3] A high proportion of the adult population (62.4%) use informal products, with 29% using informal groups; 33% borrow from informal sources; 37% belong to a burial society and 11% use informal remittance services. Approximately 70% of adults with access to formal financial products also had an informal product, with more than half (52.3%) having access to more than one such product.[4]
The SLB offers home loans ranging from M100 000 (US$6 093) to M10 million (US$609 332) payable over 20 years at 12.5%. The SLB also offers pension-backed loans. FNB Lesotho offers loans at 11.25% per year over 20 years. Monthly repayments are capped at 30% of gross household income. Nedbank Lesotho provides home loans for property purchase.[5] The Lesotho Postbank offers medium to long-term loans to fund, re-finance and/or enhance residential property, based on the property being bonded, along with ability to repay instalments.[6]
Non-performing loans as a percentage of total gross loans in Lesotho were reported as 3.3% in 2019. This grew to 4.1% in 2021.[7] As of 2022, the total value of outstanding residential mortgages was estimated at M23 515 899.70 (US$1 432 900.25).[8]
The non-mortgage finance sector has approximately 125 registered institutions. The most dominant offering housing loans is Lesana Lesotho, which began operations in 2012. Lesana offers unsecured incremental loans of up to five years and provides loans for housebuilding to low and middle income earners working in government, state-owned enterprises and the private sector. Risk mitigation for unsecured loans is achieved through deduction of loan monthly repayments directly from salaries at source, which is agreed beforehand with employers. Loan terms range from 6 to 60 months, while loan amounts range from M1 000 (US$60.93) to M250 000 (US$15 233.31).[9]
A Credit Bureau was established by the Central Bank of Lesotho in 2015, under provision of the Credit Reporting Act of 2011. This is managed by Compuscan, a South African-affiliated firm.[10] The bureau had reportedly collected over 100 000 individual records in the two years following its establishment.[11] The World Bank estimated the credit bureau coverage (percentage of adults) at 15.8% in 2020.[12] In 2019, the Central Bank noted that data from the Credit Bureau showed worrying signs of “high levels of indebtedness in the entire credit market” as a result of “aggressive lending and lack of proper credit assessment and worthiness”.[13]
The first stock exchange, the Maseru Securities Market (MSM) opened in January 2016.[14] As of August 2022, RNB Properties Ltd was the only company listed on the MSM.[15] The Lesotho government also issues treasury bonds from time to time, with the longest maturity being 10 years. However, the bond market is illiquid, and secondary market activity is limited, as bond-holders regard bonds as savings that they keep until maturity.[16]
[1] Central Bank of Lesotho (2022). List of licensed national financial institutions as of 15 July 2022.
https://www.centralbank.org.ls/images/Public_Awareness/LFI_Double_Spread_Newspaper_Insert_July_2022.pdf. (Accessed August 17 2022).
[2] Central Bank of Lesotho (2019). 2019 Financial Stability report, Issue 4.
[3] The Global Findex Database (2021). https://www.worldbank.org/en/publication/globalfindex/Data (Accessed 02 September 2022).
[4] The Global Findex Database (2021) https://www.worldbank.org/en/publication/globalfindex/Data. (Accessed 02 September 2022).
[5] CAHF (2020). Housing Investment Landscapes: Lesotho. 2020 Housing Finance Yearbook: Lesotho profile – CAHF | Centre for Affordable Housing Finance Africa. (Accessed 22 August 2022), pg. 8.
[6] Lesotho Post Bank. https://www.lpb.co.ls/#lpb_modal (Accessed 22 August 2022).
[7] Trading Economics. 2022. Lesotho: lending interest rate. https://tradingeconomics.com/lesotho/lending-interest-rate-%-wb-data.html (Accessed 22 August 2022).
[8] Interview with CBL Officer, 18 August 2022, Maseru, Lesotho.
[9] Money Facts SA (2018). Lesana Financial Services, Lesotho. https://moneyfacts.co.za/tag/lesana-financial-services-lesotho/ (Accessed 22 August 2022).
[10] Mpaki, B. (2017). Credit Bureau expands to corporates. Lesotho Times, 27 January 2017. https://lestimes.com/credit-bureau-expands-to-corporates/ (Accessed 02 September 2022).
[11] Rakotsoane, L. Maseru: Lesotho’s Credit Bureau. https://www.thepost.co.ls/business/credit-bureau-makes-progress/ (Accessed 22 August 2022).
[12]Trading Economics (2019). Lesotho: private credit bureau coverage. https://tradingeconomics.com/lesotho/private-credit-bureau-coverage-%-of-adults-wb-data.html (Accessed 22 August 2022).
[13] Central Bank of Lesotho 2019. Financial Stability Report December 2019, Issue No.4 (Accessed 11 August 2022). https://www.centralbank.org.ls/images/Publications/Supervision/2019_Financial_Stability_Report.pdf (Accessed 22 August 2022). Pg. 8.
[14] CAHF (2020). Housing Investment Landscapes: Lesotho. 2020 Housing Finance Yearbook: Lesotho profile – CAHF | Centre for Affordable Housing Finance Africa (Accessed 22 August 2022), pg. 3.
[15] Maseru Securities Market (2022). Listed Companies. https://www.msm.org.ls/listed-companies (Accessed 22 August 2022).
[16] CAHF (2020). Housing Investment Landscapes: Lesotho. 2020 Housing Finance Yearbook: Lesotho profile – CAHF | Centre for Affordable Housing Finance Africa (Accessed 22 August 2022), pg. 3.
Affordability
Prior to the pandemic, unemployment and poverty rates were already high. In 2021 the unemployment rate was 22.5% (strict definition), but was 38.3% when unemployment was defined to include discouraged job-seekers.[1] A third of the population lives below the national poverty line of M31.18 (US$1.90/per person per day). In 2017 the Gini Coefficient was 0.45,[2] showing some improvement from the figure of 0.55 recorded in 2010.[3] In 2019, informal employment made up 40.5% of total employment, at 521 445 people. The proportion of men in informal employment was significantly higher at 66.9% than that of women at 33.1%.[4]
With nearly 70% of households earning less than M1 000 (US$61) per month and a household: income expenditure of 4:1, most households can only afford a housing unit of M48 000 (US$2 925), which no bank would be willing to finance. Using survey data from 2015, UN-HABITAT estimated that the median household expenditures in most urban areas were between M10 000 and M20 000 per annum (US$609-US$1 219), being higher in Maseru.[5] An assessment shows that most of these households were willing to pay between M700 (US$43) and M2 000 (US$122) a month for a dwelling. This would allow the repayment of loans of M123 086 to M338 895 (US$7 500 to US$20 650), including a down payment of 20% and an interest rate of 12% over 20 years. The low income population in the capital city can afford only M1 000 (US$61) per month, or an affordable loan amounting to M90 000 (US$5 484). These affordability levels could translate into a basic one-room housing unit for a household. Such low affordability levels are not attractive to banks.[6]
In 2022, the typical cost of an unserviced urban residential plot in the capital city is approximately M119.00/m2 (USD$7.25). A newly built affordable housing unit costs approximately M200 000 (US$12 187).
[1] Bureau of Statistics: Lesotho Labour Force Survey Report. https://www.bos.gov.ls/Publications.htm (Accessed 25 August 2022).
[2] Trading Economics (2021). Gini Index Lesotho. https://tradingeconomics.com/lesotho/gini-index-wb-data.html (Accessed 25 August 2022).
[3] CEIC data (2010). Lesotho LS: Gini Co-efficient. https://www.ceicdata.com/en/lesotho/poverty/ls-gini-coefficient-gini-index-world-bank-estimate (Accessed 25 August 2022).
[4] Bureau of Statistics: Lesotho Labour Force Survey Report.
https://www.bos.gov.ls/Publications.htm (Accessed 25 August 2022). Pg. 104.
[5] UN-Habitat (2015) Lesotho Housing Profile. Nairobi: UN-HABITAT. Lesotho Urban Housing Profile | UN-Habitat (unhabitat.org). (Accessed 15 Sept 2022). Pg. 5
[6] UN-Habitat (2015) Lesotho Housing Profile. Nairobi: UN-HABITAT. https://unhabitat.org/lesotho-urban-housing-profile (Accessed 15 Sept 2022), Pg 7.
Housing supply
Recent projections of housing need show that 170 000 rooms or 99 000 dwellings, inclusive of the replacement of old housing stock, would be required between 2006 and 2025. This translates into 5 200 new dwellings a year over this period.[1]
The government does not provide housing directly but focuses on creating an enabling environment through developing housing policies, such as the Lesotho National Housing Policy of 2018. It also delivers housing indirectly through its state-owned corporation, the Lesotho Housing and Land Development Corporation (LHLDC), established in 1988. The corporation has to date delivered slightly over 10 000 serviced plots and is currently undertaking a site-and-service project, named Maseru-North-Bound (MANOBO), on the outskirts of Maseru. The project combines income levels and consists of 287 (30% of the total project) plots for low income housing, 373 (40% of the total project) plots for middle income housing and 289 (30% of the total project) plots for high income housing.[2]
Nearly 90% of urban households in lowland and mountain towns live in owner-built houses on land acquired informally through customary land allocation or on plots carved from agricultural land surrounding urban areas by field-owners and informal real estate agents. Most residential neighbourhoods are generally well serviced with improved water sources (77.7%),[3] basic sanitation (42%),[4] and electricity (77.7%).[5] The biggest challenge is road infrastructure, which consists largely of poor gravel roads and unpaved access streets since most settlements have developed informally without any planning input or building permission. It takes approximately 4.5 days to obtain a building permit.[6]
Most rental housing consists of rows of rental rooms or malaene,[7] with few apartment blocks. The proportion of rented housing is higher in the larger urban areas (over 30 000 people) than in smaller urban areas. In the larger towns, the proportion of rented housing is higher in low income neighbourhoods than in middle and high income areas. In the capital city, Maseru, 61.3% of housing units in low income areas was rented compared to 36.4% in middle and high income areas.[8] In some parts of Maseru, especially where garment factories are located, seven in 10 households are tenants in malaene units, often in stand-alone rental yards or as out-buildings on the same plot.[9] Over 70% of tenants are also likely to be women.[10] The gender profile of landlords is not known, but indications are that it could be a ratio of four female to six male landlords in the newly developed informal neighbourhoods in Maseru.[11] Backyard rentals do not exist.[12]
Most urban households live in informal settlements in housing built by hired contractors and artisans. Most of these housing structures are constructed from durable building materials and are in a reasonable physical condition.[13] A UN-HABITAT survey showed that 61% to 87% of housing in the major urban areas has brick or cement block walls, 31% to 73% have ceramic tile floors and 57% to 89% have corrugated iron roofs.[14] Except for dressed sandstone, mud bricks and concrete blocks, other types of building materials, such as cement and most roofing materials (except thatch) are imported from South Africa. Temporary structures are built from cardboard, plastic sheets or recycled wall and roofing materials, and are more likely to be used for storage purposes or for informal businesses. Most housing units are, therefore, structurally sound and provide their occupants with sufficient protection from most natural elements. No data exists on the number of housing units built in hazardous locations.[15] Most informal settlements lack basic road infrastructure services, and are poorly laid out, but are structurally sound.[16]
Land for urban housing is supplied through formal and informal or customary channels. Over 70% of the urban population (across all income groups), are helped to obtain land by customary authorities, principally in unplanned and unserviced locations.[17] At national level, the 2016 population census shows that 41% of households had customary certificates of allocation, 16% had registered leaseholds, 4% had registered title deeds and 39% had no title to their land.[18] Formal supply of housing land is minimal. The most important source for such land is the Lesotho Housing and Land Development Corporation (LHLDC), which supplies serviced plots to low, middle and high income households.
For residential plots, the regulations prohibit the registration of a residential plot bigger than 1 000m2. No single individual is also allowed to cumulatively hold residential land of more than 5 000m2 (five plots of 1 000m2 each maximum). However, the Land Administration Authority (LAA) stipulates a minimum residential plot must be 375m2. Plots smaller than this may not be registered.[19]
[1] UN-Habitat (2015) Lesotho Housing Profile. Nairobi: UN-HABITAT. https://unhabitat.org/lesotho-urban-housing-profile (Accessed 15 Sept 2022), Pg. 5
[2] Telephonic Interview, member of the LHDC, 06 August 2022.
[3] The Global Economy.com (2020). Lesotho access to drinking water. https://www.theglobaleconomy.com/Lesotho/drinking_water_urban/ (Accessed 06 September 2022).
[4] The World Bank (2020). People at least using basic sanitation services, Urban, Lesotho. https://data.worldbank.org/indicator/SH.STA.BASS.UR.ZS?locations=LS (Accessed 06 September 2022).
[5] Trading Economics (2021). Access to electricity urban Lesotho. https://tradingeconomics.com/lesotho/access-to-electricity-urban-%-of-urban-population-wb-data.html (Accessed 06 September 2022).
[6] Trading Economics (2021). Days to obtain a construction related permit Lesotho. https://tradingeconomics.com/lesotho/days-to-obtain-a-construction-related-permit-wb-data.html (Accessed 06 September 2022).
[7] This is a rectangular building, normally of concrete blocks or local bricks, comprising rows of single rooms (roughly 4m x 4m) or two-roomed suites, rented to households. (UN-HABITAT, 2015 : Lesotho Housing Profile. Nairobi).
[8] UN-Habitat (2015) Lesotho Housing Profile. Nairobi: UN-HABITAT. https://unhabitat.org/lesotho-urban-housing-profile (Accessed 15 Sept 2022), Pg. 5.
[9] Bureau of Statistics: Lesotho Labour Force Survey Report. https://www.bos.gov.ls/Publications.htm (Accessed 25 August 2022). Pg. 104.
[10] Kingdom of Lesotho (2015). Habitat III National Report 2015. Third United Nations Conference on Housing and Sustainable Urban Development. Ministry of Local Government and Chieftaincy Affairs. Lesotho-Habitat-III-Report-08-June-2015.pdf (habitat3.org) (Accessed 15 Sept 2022).
[11] Lesefa, R.M (2017). Landlord and Tenant Relationships in Ha Matala Maseru. Undergraduate degree dissertation, National University of Lesotho; Sehlae, S. (2017). Sources of finance for rental housing in Borokhoaneng Maseru. Undergraduate degree dissertation, National University of Lesotho.
[12] UN-Habitat (2015) Lesotho Housing Profile. Nairobi: UN-HABITAT. https://unhabitat.org/lesotho-urban-housing-profile (Accessed 15 Sept 2022).
[13]UN-Habitat (2015) Lesotho Housing Profile. Nairobi : UN-HABITAT. https://unhabitat.org/lesotho-urban-housing-profile (Accessed 15 Sept 2022).
[14] Bureau of Statistics (2019). Lesotho Labour Force Survey Report. https://www.bos.gov.ls/Publications.htm
(Accessed 25 August 2022). Pg. 104.
[15] Bureau of Statistics (2019). Lesotho Labour Force Survey Report. https://www.bos.gov.ls/Publications.htm (Accessed 25 August 2022). Pg. 104.
[16] UN-Habitat (2015) Lesotho Housing Profile. Nairobi: UN-HABITAT. https://unhabitat.org/lesotho-urban-housing-profile (Accessed 15 Sept 2022).
[17] UN-Habitat (2015) Lesotho Housing Profile. Nairobi: UN-HABITAT. https://unhabitat.org/lesotho-urban-housing-profile (Accessed 15 Sept 2022).
[18] Bureau of Statistics (2016). 2016 Population and Housing Census: Key Findings. Pg. 19
[19] Land Administration Authority (LAA). Lesotho Laws. https://www.laa.org.ls/laws/ (Accessed 22 July 2022).
Property markets
The LAA’s land tenure and title registration system is only partially digitised, and will be complete by the end of 2023. The LAA also hosts a centralised deeds registry office.[1] At the beginning of the 2016 the length of time to register a new lease had been reduced to 10 days and this has been maintained in the current strategic plan period (2020-2023).[2] The steps for registering a new lease are dependent on the initial clarity of tenure status for newly registered properties, especially for pre-registration adjudication. However, once tenure issues are sorted out and registration fees paid, it takes four days to register a property.[3] As of August 2022 there were 99 409 registered residential properties in Lesotho.[4] The registration of deed of transfer costs M300 (US$18.28) , residential property M100 (US$6.09) and commercial, industrial, warehouse, petroleum, or hotel and guesthouse purposes are set at M200 (US$12.19).[5] In 2019 Lesotho ranked 122 out of 190 in the World Bank’s Doing Business Indicators. On property registration the rank was 114 and it was 165 on dealing with construction permits.
Formal land market data is notoriously difficult to find in Lesotho. Consultants involved in an appraisal study of Maseru in 2010 concluded that beyond the old urban boundaries (the colonial reserve), a formal property market existed only in isolated areas. The LAA’s audit report for 2015-16 shows 2 029 registered transactions,[6] but it is not clear if these are annual or cumulative figures. Also, with the exception of Maseru, which has a 28-year-old partial valuation roll that covers only 16% of rateable properties, no comprehensive property valuation exists. A few companies provide property-related services, with estate agencies being only a small component. However, recently the number of informal estate agents who subdivide and sell per-urban land parcels has grown rapidly.
[1] LAA Strategic Plan 2020-2023. https://www.laa.org.ls/strategic-plan/ (Accessed 06 September 2022).
[2] LAA Strategic Plan 2015-2018. https://www.laa.org.ls/strategic-plan/ (Accessed 06 September 2022).
[3] LAA (2016). Audit Report 2015-2016 https://www.laa.org.ls/annual-reports (Accessed 06 September 2022).
[4] Personal communication, LAA Outreach Office, Maseru, 18 August 2022.
[5] Lesotho Government Gazette No. 16 of 19 February 2021.
[6] LAA (2016). Audit Report 2015-2016 https://www.laa.org.ls/annual-reports/ (Accessed 06 September 2022).
Policy and regulation
Lesotho has suffered from numerous changes of government since 2012, which has delayed the implementation of policy crucial to the housing sector.
Most households still uphold customary rules, which consider single and married women as minors unable to access credit or inherit a property without the assistance of a male provider. However, the enactment of the Harmonisation of the Rights of Customary Widows, with the Legal Capacity of Married Persons Act No. 19 of 2022, has removed formal discriminatory customary rules. The main land statute (Land Act 2010) also does not discriminate between persons on the basis of gender. However, persons under the age of 18 years may only hold immovable property through their parents or legal guardians. Prior to the Land Act, approximately 4% of leases were jointly registered, 73% being registered to men alone, 23% to women alone. However, from 2011 to 2015, 25% of new leases were jointly registered, 14% being for men alone and 34% for women alone.[1] These Acts have significantly empowered women.
In July 2022 the government adopted a Local Construction Industry Development Policy. It is hoped that the enactment of a Construction Industry Development Act and the Lesotho Council for Built Environment Professions Act will soon follow. The purpose is to put in place an industry body that will regulate all actors in the building construction industry.[2] In 2020, a new regulatory body, the Contractors Association of Lesotho, was legally registered to regulate the professional practice and conduct of its members.[3]
The most recent housing specific related legislation is the Sectional Titles Bill 2011, which is yet to be enacted by parliament. It aims to facilitate separate ownership of a section or sections of a building in a building complex without necessarily owning the land on which the building stands. None of the policies and proposed (including old) legislation make any explicit reference to green building methods. Slum prevention through demolition or resettlement is also not the norm in Lesotho, although it has occurred in Maseru city in the past.[4]
[1] Leduka, R.C., Ntaote, M. and Takalimane, N. (2018). Land Governance in Lesotho. NELGA-HUB, University of Namibia. Pg. 25.
[2] Local Construction Industry Development Policy for Lesotho (2020). Obtained via e-mail. 01 July 2022.
[3] Constitution of the Contractors Association of Lesotho (2020). Obtained via e-mail correspondence. 15 May 2021.
[4] Tsietsi, T. and Leduka R. C (2009). The Judicial Construction of the Right to the City in Lesotho. Lesotho Law Journal. 18(2): 205-239.
Opportunities
Opportunities exist in the incremental micro-finance lending sector where micro-loans can play a significant role in housing development. Opportunities also exist in green housing modules that could lower the costs of construction while ensuring the thermal comfort of occupants. Affordable planned serviced land, in appropriate locations for all income groups, but particularly for low income households, is in short supply. Opportunity exists for the private sector to partner with state-owned entities to supply serviced land to meet existing demands.
Availability of Data on Housing Finance
Data on housing finance is incredibly difficult to access, ostensibly because the organisations that collect the data are reluctant to publicly share it. The data available from secondary sources is often either out-dated or presented in unusable format. Data is also rarely disaggregated by gender. The key sources of data on housing finance are:
- The Lesotho Bureau of Statistics;
- The Central Bank of Lesotho;
- The four commercial banks, Nedbank Lesotho, Standard Lesotho Bank, First National Bank Lesotho and the Lesotho Post Bank;
- The Lesotho Housing and Land Development Corporation; and
The Land Administration Authority.
Green Applications for Affordable Housing
Lesotho has no green building standards. The Building Control Act of 1995 sets standards on building materials, fire resistance, ventilation, sanitation, plumbing and drainage, but is silent on green agenda issues. Other housing-related legislation is equally silent on green issues.
Lesotho has significant potential for green energy from water, wind and solar, with over 300 sunny days in any given year. A 70MW ground-mounted photovoltaic power plant covering 220ha is nearing completion in Mafeteng. The Muela Hydropower Plant in Botha-Bothe current generates 72MW of electricity. The country could produce 450MW from hydropower and export excess power to cater for emerging demand in South Africa and the sub-region.
Websites
Habitat for Humanity Lesotho: https://www.habitat.org
Central Bank of Lesotho: https://www.centralbank.org.ls
Land Administration Authority: https://www.laa.org.ls/annual-reports/
Lesotho Bureau of Statistics: https://www.bos.gv.ls
Lesotho Housing and Land Development Corporation: https://www.lesothohousing.org.ls
