Report Reveals Rent Consumes 70% of Average Household Income

A new report has shed light on the deepening housing affordability crisis in Nigeria, revealing that rent consumes up to 70% of household income in major urban centres. The report, compiled by the Nigerian Economic Summit Group (NESG) in collaboration with the Centre for Housing and Urban Development, paints a grim picture of the financial pressure many families face in securing basic shelter.

According to the findings, rent has become the single most significant non-food expense for most urban households, particularly in Lagos, Abuja, Port Harcourt, and other fast-growing cities. The report attributes the trend to a combination of stagnant wages, inflation, lack of affordable housing, and increasing rural-to-urban migration, which has placed huge demand pressure on limited housing supply.

The study, which sampled over 3,000 households across 12 states, found that a significant proportion of low- and middle-income earners spend more than two-thirds of their monthly income on rent. This is well above the global benchmark recommended by the United Nations, which advises that no more than 30% of a household’s income should be spent on housing.

Dr. Mojisola Adeyemi, a housing economist and co-author of the report, noted that this unsustainable expenditure pattern is contributing to a cycle of poverty and debt among working families. “When households are forced to allocate 60–70% of their income to rent, they are left with very little for food, healthcare, education, or savings. It’s a systemic issue that must be addressed,” she said.

The report also highlighted how the informal rental market continues to dominate the housing sector in Nigeria. With most landlords demanding one to two years’ rent upfront, tenants are often forced to borrow or divert funds from essential needs to meet rental demands. This, experts argue, creates a fragile financial situation for families and increases social vulnerability.

One of the key observations from the report is the widening gap between the supply of affordable homes and the exploding demand. Nigeria currently faces a housing deficit estimated at over 22 million units. While efforts have been made through various government housing schemes, such interventions have largely fallen short due to bureaucratic bottlenecks, lack of political will, and limited private sector engagement.

In Lagos State, where housing costs are particularly severe, the average rent for a one-bedroom apartment ranges from ₦400,000 to ₦1.2 million annually, depending on location. For a junior-level worker earning ₦100,000 monthly, this means more than half of their income goes towards rent—often even more when factoring in service charges, electricity, and water costs.

The report recommends a multi-pronged approach to tackle the housing affordability crisis. These include the expansion of mortgage access for low-income earners, introduction of rent-to-own schemes, reduction of land acquisition bottlenecks, and promotion of low-cost housing development through public-private partnerships.

It also calls for the enforcement of tenancy laws that protect tenants from exploitative practices, such as arbitrary rent increases and unlawful evictions. “We need a national housing reform policy that targets urban poor and the working class, not just civil servants or elite professionals,” Adeyemi added.

Stakeholders have reacted strongly to the findings. The Nigerian Labour Congress (NLC) described the situation as “a ticking time bomb” and called on the federal and state governments to prioritise housing in their economic recovery plans. “Decent and affordable shelter is not a luxury; it’s a human right. Our members are living under unbearable conditions because their salaries can’t match rental demands,” said NLC spokesman Benson Udu.

In the private sector, some property developers acknowledged the affordability gap and are seeking ways to address it through modular housing, smaller apartment designs, and community-based financing models. However, they point to rising construction costs, high interest rates, and lack of incentives as major hurdles.

The Federal Mortgage Bank of Nigeria (FMBN), in response to the report, reiterated its commitment to helping Nigerians own homes through its National Housing Fund (NHF) scheme. In a statement, the bank disclosed that it is working on reforming its processes and expanding collaborations with state governments and cooperatives to deliver more units at affordable rates.

Meanwhile, the Ministry of Housing and Urban Development has promised a new national framework that aligns with President Bola Tinubu’s Renewed Hope agenda. The policy is expected to include fiscal incentives for developers, digitised land titling systems, and a unified housing database to guide interventions.

As more Nigerians continue to grapple with the high cost of living, experts say solving the rent burden must be seen as an economic and social priority. Without urgent reforms, millions may be pushed further into poverty, while urban slums continue to expand due to the unaffordability of formal housing.

 

With the population projected to surpass 220 million by 2030, the urgency to make housing accessible and affordable has never been more critical. The report concludes with a call for decisive, inclusive action, stressing that the health of Nigeria’s economy depends in no small part on how well its people are housed.