Lagos rents rise as housing provide tightens

A report by Knight Frank has revealed that though headline inflation eased within the second half of 2025, residential rents in Lagos continued to rise, with notable will increase recorded in some areas in contrast with H2 2024.

In response to the report, introduced just lately throughout the H2 2025 version of the Lagos Market Replace, sustained rental progress displays resilient underlying demand in a market characterised by structurally constrained housing provide. It added that the restricted availability of formal residential inventory continues to underpin pricing dynamics, sustaining elevated affordability pressures throughout the market.

“Regardless of a moderation in headline inflation throughout the interval underneath overview, residential rents throughout Lagos continued to pattern upwards, with vital will increase recorded in choose areas in comparison with H2 2024. This sustained rental progress displays resilient underlying demand inside a market characterised by structurally constrained housing provide”, the report acknowledged.

Knight Frank, nonetheless, identified that, in response, authorities interventions centered on incremental provide supply, housing finance, and regulatory reform. It careworn that public-private partnerships with the Lagos State Authorities facilitated the supply of roughly 653 residential models throughout the interval underneath overview, whereas further schemes remained inside the improvement pipeline.

The group added that coverage consideration additionally prolonged to tenancy regulation, as a proposed reform invoice gained legislative traction.

“On the financing entrance, the launch of the Ministry of Finance Integrated Actual Property Funding Fund by the Federal Authorities, providing long-term loans at 9.75 per cent, alongside progress on the Federal Authorities’s Renewed Hope Housing Programme, with round 2,000 models nearing completion in Ibeju-Lekki, signalled continued public sector efforts to deal with housing shortages,” it added.

It predicted that, in 2026, rental demand will think about “useful residing”, with studio and one-bedroom models in mid-market hubs like Yaba and Surulere seeing the quickest absorption as a consequence of their decrease entry factors.

Knight Frank identified that provide will more and more observe infrastructure milestones, notably alongside the Lagos-Calabar Coastal Freeway and Epe corridors, the place improved connectivity is popping peripheral land into prime residential inventory.

The group highlighted that, whereas rental progress will persist, the market will grow to be extra clear because the Nigerian Tax Act 2025 pushes landlords and tenants towards formal and documented agreements to seize new tax reliefs.

“Lagos residential rents continued rising regardless of moderated headline inflation. Authorities delivered 653 residential models by means of public-private partnerships”, it concluded.

Knight Frank is a worldwide, privately owned actual property consultancy and property company headquartered in London. It advises on and transacts residential, industrial, agricultural, and mixed-use properties worldwide, with a robust concentrate on prime and luxurious markets. The agency is thought each for brokerage and for its influential market analysis on international property and wealth developments.