Unlicensed and unregulated property agents are playing a major role in inflating housing costs in Ghana, according to the Rent Control Department. The department’s Senior Rent Officer and Head of Public Relations, Emmanuel Xove Kporsu, told CitiNewsroom that the misbehavior of some brokers is distorting the rental market and pushing tenants to pay far more than they should.
Speaking on Channel One TV’s Breakfast Daily, Mr Kporsu emphasized the need for regulation. “You cannot sit under a tree and call yourself an agent. It is an offence to call yourself an agent if you do not have your licence. The space will be regulated.”He noted that under the Real Estate Agency Act (2020), a regulatory council has now been established to license agents, prescribe approved fees, and enforce operational discipline.
How Agent Conduct Is Fueling Rent Hikes
Mr Kporsu directly linked high rents to collusion between agents and landlords. Although the law prohibits landlords from demanding more than six months’ rental advance, he explained, some agents influence landlords to demand up to two years’ rent upfront. “The agent is a contributor to the high rent in Ghana. The law says the landlord does not have the right to demand more than six months’ rent advance, but the tenant has the right to pay more than six months. … The issue is that the agent colludes with the landlord to demand two years because they feel their fees are small if they take only six months.”
This practice not only burdens tenants with large lump-sum payments but also encourages rent inflation, because agents see more commission when advance payments are large.
Economic Cost of Rent Inflation in Ghana
The financial implications of these rent practices are substantial. A recent feature in GBC Ghana highlights the “chaotic rent system” in which long-standing demands for two to three years’ advance rent remain commonplace despite legal limits. According to the same report, the average monthly rent for a modest self-contained room ranges between GHS 1,000 and GHS 1,500, translating to GHS 12,000–18,000 annually, a significant burden for many households.
Academic research reinforces the severity of the problem. A study published in the Journal of Housing and the Built Environment found that many urban poor are forced to pay 1 to 3 years’ rent in advance, despite the law. These high advance payments often force low-income renters to take high-interest loans or otherwise compromise their financial stability. The same study noted that over 70% of surveyed renters make such advance payments, with 63% having no formal rental contract, making them especially vulnerable to exploitation.
Another empirical study in the Advances in Social Sciences Research Journal found that 72% of its respondents had paid advance rent, many taking on debt just to satisfy landlords’ demands. The authors argue that these practices persist because demand for rental housing far outstrips supply, giving landlords and agents disproportionate bargaining power.
Agents’ Role and Market Distortion
Industry observers note that many agents operate informally, without certification or oversight. Unlicensed agents routinely charge non-refundable viewing fees of GHS 150–200 before showing a property, even when the tenant never secures the home. Once a lease is agreed, agents often demand a commission of 10% of the total rent, which can run into thousands of cedis for multi-year leases.
This lack of regulation has several unintended economic consequences. First, it reduces affordability: when agents inflate their fees or push for large advance payments, tenants must tie up more capital that could otherwise be used for productive investment or consumption. Second, it encourages speculative or inflated rent-setting: landlords, knowing that agents can push tenants to pay more, may set base rents artificially high. Third, it undermines trust in the formal rental market, possibly diverting tenants into informal or substandard housing arrangements.
Broader Market Pressures & Institutional Weakness
These agency cost issues interact with broader macroeconomic and structural pressures. Rapid urbanization in Ghana has driven up housing demand, particularly in cities like Accra, outpacing the supply of new rental units. According to Ghana’s Housing Profile, about 34.6% of households rent, and in urban centers, demand is especially intense. Tenant protection mechanisms are weakened by institutional capacity gaps: while regulation exists on paper, enforcement remains inconsistent.
Financial and Policy Risks
From a business and economic standpoint, the Rent Control Department’s warning raises serious risk signals for both tenants and investors. For tenants, the financial burden of excessive advance payments and agent fees drains cash flow, limiting their ability to save, invest, or manage other expenses. For investors and developers, such distortions risk reducing the fluidity of the rental market; new tenants may be discouraged by upfront costs, reducing demand and occupancy rates.
Furthermore, regulatory failure could erode investor confidence. If agents continue to operate without oversight, and if rent-setting remains opaque and inflated, both domestic and foreign investors may view Ghana’s rental market as unstable and driven by rent-seeking, rather than genuine housing fundamentals.
