Uganda’s housing and construction sector has received a significant regulatory boost following the assent by H.E Yoweri Kaguta Museveni to three key pieces of legislation that is, the Building Control (Amendment) Act, 2025, the Mortgage Refinance Institutions Act, 2025, and the Valuation Act, 2025.
Signed at State House Entebbe on the 19th of February 2026, these laws collectively signal a structural reform agenda aimed at improving safety standards, deepening housing finance, and professionalising property valuation in Uganda.
From a research and policy perspective, this reform package is both timely and economically consequential. Uganda’s rapid urbanisation, estimated at over 5% annually, has intensified demand for housing, infrastructure, and real estate services.
However, this expansion has often occurred alongside weak enforcement of building standards, limited access to long-term mortgage financing, and inconsistencies in property valuation. The 2025 legislative reforms directly address these structural bottlenecks.
1. Building Control (Amendment) Act, 2025: Enhancing Safety and Accountability
The construction sector has been one of Uganda’s fastest-growing industries, contributing significantly to GDP and employment. Additionally, the construction sector registered a GDP growth of 11.6% in 2024/25 as well as reaching an all time high of 2.9 UGX trillion contribution to GDP in the second quarter of 2025. However, building collapses and substandard developments have imposed substantial economic and social costs, ranging from loss of life to capital destruction and insurance losses.
The amended Building Control framework introduces stricter penalties for illegal construction and non-compliance with approved standards.
From an economic standpoint, stronger enforcement mechanisms can reduce negative externalities associated with unsafe construction, improve investor confidence in the real estate market, lower long-term infrastructure maintenance and reconstruction costs, and promote formalisation within the construction industry. By tightening compliance, the Act shifts incentives toward quality assurance and professional accountability. This can raise productivity in the sector and align Uganda’s urban development trajectory with international safety standards.
2. Mortgage Refinance Institutions Act, 2025: Deepening Long-Term Housing Finance
Housing affordability in Uganda remains constrained by limited access to long-term credit. Mortgage penetration is low relative to GDP with mortgage loans accounting for less than 1% of GDP in recent years, and commercial banks often rely on short-term deposits to finance longer-term housing loans thus creating maturity mismatches and liquidity risks. The new law empowers the Bank of Uganda to regulate mortgage refinance institutions (MRIs).
This reform is particularly significant for three reasons: Mortgage refinance institutions enhance long-term liquidity for banks, enabling them to issue longer-tenure housing loans without maturity mismatches; By lowering funding costs, they can help reduce mortgage interest rates and improve housing affordability; Central bank oversight further strengthens prudential regulation, mitigates systemic risk, and promotes overall financial sector stability.
International experience suggests that well-regulated mortgage refinance frameworks can catalyse housing market development, stimulate construction activity, and create multiplier effects across related industries such as cement, steel, labour, transport, and professional services.
3. Valuation Act, 2025: Professionalising Property Markets
Reliable valuation is foundational to a well-functioning property and mortgage market. Weak or inconsistent valuation practices can distort collateral assessment, inflate asset bubbles, or undermine financial stability. The Valuation Act establishes the Institute of Certified Valuers to oversee professional standards, registration, and regulation of valuers in Uganda. The reform closes key gaps by standardising valuation practices to enhance transparency, strengthening professional credibility to build market trust, and improving risk management through more accurate asset pricing. At the macro level, credible valuation supports efficient capital allocation, improves collateral assessment, strengthens loan portfolio quality, and enhances overall financial intermediation.
While the legislative reforms are promising, their effectiveness will depend on implementation capacity. Key considerations include, adequate resourcing of regulatory agencies, capacity building for local governments in building inspection and compliance, effective supervision of mortgage refinance institutions, transparent operationalisation of the Institute of Certified Valuers, and public awareness and stakeholder engagement. Without strong institutional follow-through, regulatory reforms risk remaining largely symbolic. Conversely, well-executed implementation can yield measurable improvements in housing supply, financial stability, and urban governance.
In conclusion, the assent to these three Acts, marks an important milestone in strengthening Uganda’s housing and construction ecosystem. By addressing regulatory enforcement, financial deepening, and professional standards simultaneously, the reforms adopt a systemic approach to sector development. If effectively implemented, these laws have the potential to improve construction safety and quality, expand access to affordable long-term housing finance, enhance financial sector stability, and support sustainable urban development.
Featured photo/EPRC
