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Lately, there has been a sudden rise in house rents in Ikoyi, Victoria Island, and Lekki.
Many tenants in these highbrow areas are already facing a crisis as their rents have increased astronomically. Some increases are between 150 to 200 percent, and this has become a major issue. While new or potential tenants face several challenges before they can secure a new apartment of their choice, house rents in Ikoyi, Victoria Island (VI), and Lekki are skyrocketing due to a massive housing deficit, aggressive foreign exchange (FX) volatility driving up building and maintenance costs, and high demand from high-net-worth individuals. Additionally, Landlords are raising prices to cover the costs of maintaining 24/7 serviced amenities like backup generators and private security.
There are several reasons why house rent keeps increasing on the Island.
City People, Isaac Abimbade, went around and identified several key factors. Currently, in many parts of Ikoyi, Victoria Island, and Lekki axis, securing a new apartment of your choice has become a significant challenge. The house Agents, Lawyers, and Lagos State government have made the process more competitive and cumbersome. Additionally, Lagos building agencies like LASPPPA (Lagos State Physical Planning Permit Authority) and LASBCA (Lagos State Building Control Agency), along with several others, have driven up housing and rent costs by imposing high permit fees, requiring mandatory consultancy and professional reports, and causing project delays that force developers to pass compliance costs to buyers and tenants. Especially on the island, we found that developers spend at least 40-50 million on average to perfect their building titles from these agencies. Before beginning a project, several millions of naira are spent to obtain building approval from about six or seven Lagos State building Agencies. Once construction starts, LASBCA requires mandatory stage-by-stage certifications, including inspection and compliance fees calculated as a percentage of the initial building plan. Navigating government offices, document verifications, and tax clearance processes can take anywhere from months to years. This bureaucratic delay ties up invested capital and results in significant loan interest accumulation, which further drives up the final value of the property.
Apart from the factors above, we also spoke with a Ms. Chisome, who just rented a mini flat in Old Ikoyi, Lagos. She explained some of the new criteria being introduced by so-called house Agents before you can get a good house of your choice, despite the high cost of rent.
In many parts of the Island today, Agents will ask you to provide a rich uncle or relative who can stand in as a surety. This is necessary in case the tenant defaults on his or her payment. On the Island today, many of the houses, especially the newly built ones with bank loans, have owners who won’t like to default, which is why many are strict about Tenancy agreements.
Because of the high cost of land and construction on the Island, developers generally use commercial bank financing to build Estates these days. This has led many of them to adopt several methods of recouping their funds through cut-throat strategies.
This situation has made it very difficult for many people to find a house of their choice in Lagos. If you have the money to pay but fail to provide a surety, you often won’t be considered to rent an apartment.
Secondly, Island homeowners or Agents now ask for your work place payslip as a guarantee that you can pay rent on time. This is common in Ikoyi, Lekki, and Victoria Island. The house Agents want to confirm your monthly salary and see if you can afford the rent.
On many occasion, they prefer salary earners who are sure of their monthly income over business people.
Another major reason why House rent is high today is the cost of diesel. Diesel prices contribute directly to rising house rents in Lagos because the city’s erratic power supply forces these high-end properties to rely on generators. Landlords and facility managers pass these high energy and maintenance costs onto tenants through steep rent hikes and service charges.
Many apartment complexes and Estates require large industrial generators to provide constant electricity, water, and security. When the price of diesel surges, landlords drastically increase monthly or annual service charges to cover these expenses.
Do not also forget that sudden inflation in Nigeria has drastically increased house rents in Lagos through a domino effect of surging construction costs, currency devaluation, and a massive housing deficit. With the influx of thousands of people into the city daily, the demand for housing heavily outpaces the constrained supply.
The cost of importing or purchasing essential building materials—such as cement, iron rods, and electrical fittings—has skyrocketed. This forces developers to pass these expenses onto tenants, while landlords of older properties also increase rents to fund costly renovations.
Lagos battles a structurally constrained housing supply, with an estimated deficit of over 3 million units. When combined with the constant daily migration of people seeking economic opportunities, this high demand and low supply allow Agents and property owners to arbitrarily raise prices.
Property owners face inflated costs for basic utilities, tenement rates, and informal community levies (such as those paid to Omonile). These compounded charges are ultimately transferred to the tenant.
The devaluation of the Naira has increased the cost of importing foreign building materials and fixtures, significantly raising the capital required to build or maintain properties.
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