Nama extends 80:20 scheme
THE NATIONAL Asset Management Agency has extended the 20 per cent deferred payment scheme to woo buyers for a further 180 residential properties after selling, or agreeing to sell, just over a third of the properties in a pilot scheme.
A spokesman for the State loans agency said 41 of the 115 properties supporting Nama’s loans that were put on the market in the pilot of the “80:20 Deferred Payment Initiative” had either been sold or sales had been agreed since May.
The initiative, which protects buyers against falls of up to 20 per cent in the value of the proprieties over the next five years, has been applied to 295 homes, or just over a third of properties Nama wants to sell in this way.
The scheme was piloted on 12 developments in Dublin, Cork and Meath. Nama has now extended the initiative to nine more counties: Galway, Kerry, Carlow, Clare, Kildare, Kilkenny, Limerick, Sligo and Wexford.
The new properties in the latest group range from two-bedroom to five-bedroom properties with prices starting at €100,000.
Nama said buyers were still concerned about further price falls.
“This initiative is still at an early stage but it has been favourably received by prospective purchasers,” said Nama chief executive Brendan McDonagh. “It is aimed at instilling confidence in people that they can buy a home without the immediate worry of falling values and facilitating greater price discovery.”
Nama has said it intends to put up to 750 properties on the market in total under the initiative. The agency said it has about 14,000 residential units in Ireland, of which about 9,200 are rented.
The initiative is aimed at buyers who are put off purchasing a property because of the fear of being left in negative equity if the property market continues to fall.
Irish residential property prices fell by almost 12 per cent in the year to August, bringing peak-to-trough declines to about 50 per cent since 2007, though prices have fallen further in some parts.
Among the new properties on offer are six properties at Silken Park in Citywest, Dublin; Castleoaks, Dublin Road, Carlow; Churchfields, Clonlara, Co Clare; Tír Cluain, Midleton, Co Cork; Castle Heights in Carrigaline, Cork; Páirc na Rí, Athenry, Co Galway; and Oakfield, Park Road, Killarney, Co Kerry.
There are further properties at Cluain Bhearu in Athy, Co Kildare; The Weir on Castlecomer Road, Kilkenny; Castlerock, Castleconnell, Limerick; Silverstream, Stamullen, Co Meath; Fitzherbert Wood, Slane Road, Navan, Co Meath; Ardfinn, Strandhill Road, Co Sligo; and Elderwood, Castlebridge, Co Wexford.
Six more homes at Carrickmines Manor have been put on the market in addition to four properties in the south Dublin development offered in the pilot scheme.
Bank of Ireland, EBS and Permanent TSB will give mortgages to buyers interested in the properties under the plan if they have a deposit of at least 10 per cent and meet lending terms and conditions. The borrower pays 80 per cent of the purchase price up front and the remainder if the value has not declined after five years.
BUYING SOLO IN PILOT SCHEME FOUR-BED FOR FIRST-TIME BUYER
ANNE CLEARY (30), a single office manager, had been looking to buy a house for about two years.
Nama’s deferred payment plan was attractive as it protected her against negative equity and a further 20 per cent decline in property values, but it was the house itself that made her bid for the property.
A first-time buyer, she is sale agreed on an end-of-terrace four-bedroom house in Carrickmines Manor, Dublin 18, for a price of €300,000. The house was on the market in 2007 for €800,000.
It is one of four properties on the Carrickmines development, built by construction company Pierse and developer Paddy Kelly, that were among the 115 properties put up for sale in Nama’s pilot scheme.
Under the Nama 80:20 initiative, Cleary had to be approved for a mortgage for the full purchase amount, which she has agreed with Bank of Ireland, one of the three banks offering mortgages to buy properties under the scheme.
She is paying a 10 per cent deposit on the property and following the same lending terms and conditions that others follow.
Cleary will pay Nama 80 per cent of the purchase price (€240,000) up front and, if the value of the house falls by 20 per cent over the next five years, she will not have to pay the remaining €60,000 of the purchase price.
“Nobody knows what’s going to happen but I have the scope that it can fall to €240,000 without me being in negative equity,” Cleary says.
“I don’t believe they will fall below €240,000 for a four-bedroom in Dublin 18.”