Deferred payments plan aims to restart property trade

NAMA is to introduce a deferred payments scheme in an effort to kick-start the property market as it yesterday released details of 847 properties that are in receivership or administration.

NAMA chairman Frank Daly explained that the agency would initially seek only 80% of the purchase price of any property under its control which will be placed for sale.

Under the scheme, buyers will not have to pay 20% of the purchase price for the first five years.

At that stage, they would only have to pay the remainder if the original value of the property had not fallen in the intervening period.

For example, a buyer acquiring a house being sold for €200,000 could put up a deposit of €20,000 and seek a mortgage of €180,000.

NAMA would defer seeking payment of €40,000 (20% of the property value) for a five-year period. At that point, the buyer would only have to pay the full outstanding sum if the value of the property in 2016 was still at least €200,000.

Mr Daly said that NAMA would waive the value of any property which had fallen in value by up to 20% as a way of enticing people, who feared falling into negative equity by buying in 2011, back into the marketplace.

Following talks with AIB and Bank of Ireland, he said a pilot scheme would be run in the autumn.

It is expected that 12,000 residential properties, which included some homes located outside the Republic under NAMA’s control could be sold under the initiative. “Our overall aim is to get the residential property market moving again,” he said.

NAMA chief executive Brendan McDonagh rejected any suggestion that taxpayers’ money was being placed at risk by the scheme.

He estimated that the agency would forego €200 million in the worst-case scenario if property values continued to fall over the next five years. However, he said sales of such properties would also generate €135m in tax revenue, so the potential maximum loss to the exchequer should only be €65m. “It could cost more if we held on to these properties for another five years.”

Mr McDonagh also denied that the scheme could distort the market. “This scheme has the potential to lift all boats but we are not entering the market in a huge way.”

Meanwhile, NAMA has published a list of 847 properties over which it has taken control including hotels, pubs, residential and commercial holdings as well as agricultural land and undeveloped sites.

More than 570 of the properties are in the Republic with a further 78 in Northern Ireland and 193 in Britain.

Dublin accounts for 220 properties, followed by Cork, 80, and Limerick, with 52.

Almost 30 hotels are listed, including Fota Island Hotel and Golf Course in Cork, the Portmarnock Hotel and Golf Links in Dublin, The Dolmen in Carlow, the Quality Hotel in Youghal, Co Cork, the Heritage in Killenard, Co Laois, and the Glenroyal Hotel in Maynooth, Co Kildare. Others include Clarion hotels at Dublin Airport and Liffey Valley, and the Maldron hotels in Citywest, Dublin, and Roxboro, Limerick.

NAMA has also taken control of Weston Airport in Leixlip, Co Kildare, which was owned by the controversial businessman, Jim Mansfield.

Mr McDonagh said NAMA continued to engage with developers and other debtors in a “tough but fair” manner. He claimed the agency was still pursuing debtors for all unencumbered assets, citing how NAMA recently acquired jewellery worth €200,000 which belonged to a developer’s partner.

* For the full list of the properties, go to www.nama.ie/Enforcements.php.

More in this section

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.