AN APPRAISAL OF TREND IN RENTAL VALUE OF RESIDENTIAL PROPERTY WITHIN THE LAST TEN YEARS 2003-2012 (A CASE STUDY OF GRA TPS-100 ILORIN)
Housing problems in urban centers have often been viewed in terms of qualitative and quantitative inadequacy with or without attention to the problem of increasing rent.
The rent which land and landed properties may generate can be affected by some trends/factors, the aim of this study is to access and probe into the circumstances responsible for the constant changes in rental values of residential properties in the study area which are as follows; the location factors, population, characteristics of neighbourhood, architectural design, income of the people, facilities provided among others. Also, the realism of future technological advancement influences the rental value of property.
The periodic trend in rental value is considered by some landlord/owners as easy access to boost their ego. It is necessary to correct this in an area where development and commercial activities are very rampant and also in an improved speed particularly in GRA of Ilorin.
To determine the trends in rental values of properties considering its location or position in Ilorin metropolis, its level of commercial activities and the population of the people therein. It is important and paramount to estimate and arrive at the most suitable and optimum value for properties in other to forestall the level of its commercial activities and also to encourage continuous developments.
The increment in rental values have been a major setback to some people both individual, organization, government, society etc. which have in one way or the other affected their income generation. The problems have therefore led to changes in property value which remained one of the most persistent and socio-economic problems facing properties in the society at large.
The variation and the rise in the rents of real estate had led to this research work, with the aim of examining the causes, effects and the likely solutions to the problems.
TABLE OF CONTENT
Table of contents
1.1 Statement of the problem
1.2 Aim and objectives
1.3 Significant of the study
1.4 Scope of the study
1.5 Limitations of the study
1.6 Study Area (Geographical setting and historical background)
1.7 Definition of terms
2.0 Literature review
2.1 conceptual framework
2.2 Concept of value
2.3 Concept of rental value
2.4 Nature of value
2.5 Concepts of rent
2.6 Factors affecting rental values of residential property
2.7 Concept of property
3.0 Research methodology
3.1 Target population
3.2 Method of data collection
3.3 Sampling frame, sample size and sample tech techniques
3.4 Research instrument
3.5 Data analysis
4.0 Data presentation and analysis
4.1 Data collection, data analysis and data presentation
4.1.1Questionniare administered and retrieved
4.2 The analysis of residential property types
4.3 Trend of residential properties rental values
4.3 Causes of increase in rental values of residential property.
5.0 Summary, recommendations and conclusion
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 Ilorin, the state capital. This has given rise to government decision to reserve an area for government to aid administration. The influx of people into Ilorin 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] Ilorin, 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 Ilorin, 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 Ilorin was derived from Ojo-Isekuse compounds now Oke-lele of Ilorin. It was on the stone that Ojo Isekuse used to sharpen his hunting implement e.g. cutlass and arrows hence “Ilorin” (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 Ilorin identity. The ruler of the city and its environs (the Ilorin 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 Ilorin are separate and antagonistic towards one another. The indigenes guard their Ilorin cultural heritage jealously.
Ilorin is located at latitude 80300N and longitude 40350E. It lies in the plain of the south –western part of Nigeria. The city which lies along Lagos-Kaduna highway is 306 kilometers from Lagos, 600 kilometers from Kaduna and about 500 kilometers from Abuja.
The main river is Asa River; it occupies a fairly wide valley and flows south-north direction. The river divides Ilorin into two parts: western part representing the lore of indigenous area of Ilorin 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 Ilorin. 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 Nigeria counterpart lived in the area. At independence in 1960, many more Nigeria 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.
⦁ 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).