Recently, the discourse surrounding escalating housing costs has intensified, prompting legislative actions to curb excessive rent charges. Notably, Lagos State has initiated plans to cap exorbitant rents, and Enugu State is poised to follow suit. Understanding these developments is crucial for stakeholders in the real estate sector.

Lagos State’s Initiative: A Return to Rent Control

Lagos has experienced a significant surge in rental prices over the past decade. Reports indicate that between 2018 and 2023, the average cost of renting an apartment in Lagos increased by at least 100%

“Punch Newspaper, 2025”

This sharp rise has reignited discussions on rent control, reminiscent of the Rent Control and Recovery of Residential Premises Law of 1997, which sought to regulate rental values and advance payments: 

Implementation of a Monthly Rent Scheme: The state government plans to enforce a monthly rental payment system by early 2025. 

Establishment of a ₦5 Billion Rental Support Fund: To support the monthly rent scheme, the government has allocated a ₦5 billion fund. This financial backing is intended to facilitate the transition to monthly payments and ensure the scheme’s sustainability, providing landlords with an assurance of consistent rental income while offering tenants more manageable payment terms.

The reintroduction of such measures aims to stabilize the housing market, ensuring affordability for residents. However, the effectiveness of these regulations hinges on meticulous implementation and enforcement.

Enugu State’s Legislative Move: Protecting Tenants’ Rights

In a proactive response to tenants’ grievances, the Enugu State House of Assembly recently introduced a bill to amend the Landlord and Tenant Law, CAP. 101, Laws of Enugu State, 2024. Sponsored by Hon. Okey Mbah, this legislation seeks to:

• Cap agency and legal fees at a maximum of 10% of the annual rent.
• Abolish the longstanding practice of non-refundable caution fees
  “The Guardian Nigeria”
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This move underscores the state’s commitment to safeguarding tenants from exploitative charges, fostering a more equitable rental market.

Potential Impacts on Nigeria’s Real Estate Market

The ripple effects of these regulatory measures on the broader real estate market are multifaceted:

1. Investor Sentiment: While rent caps aim to protect tenants, they may deter potential investors who are concerned about investment returns. Striking a balance between tenant protection and investor interests is paramount.
2. Property Values: Regulatory interventions could lead to a stabilization or slight decline in property values, particularly in markets previously characterized by speculative pricing.
3. Market Equilibrium: Effective rent control can enhance affordability, potentially increasing occupancy rates and reducing the prevalence of vacant properties.
4. Quality of Housing: There is a concern that landlords, facing capped revenues, might reduce investments in property maintenance. Ensuring quality housing amidst regulatory changes will require vigilant oversight.

Conclusion

As Lagos and Enugu States embark on this regulatory journey, the real estate sector must adapt to the evolving landscape. Continuous dialogue among stakeholders—government authorities, investors, landlords, and tenants—is essential to navigate these changes successfully. By fostering a collaborative approach, Nigeria can aspire to a housing market that is both equitable and vibrant.

Stay informed, stay ahead.