Credit union money finally seems to have found a home

Business Comment: Asset manager Gresham House is tapping funds to help build or acquire property for social housing

As the Government’s Housing for All policy aims finally to comprehensively address the ongoing housing crisis, funding remains a key stumbling block.

As the Government’s Housing for All policy aims finally to comprehensively address the ongoing housing crisis, funding remains a key stumbling block.

 

It looks like an ideal match of money looking for a home and homes looking for funds. Asset manager Gresham House is tapping credit union funds to help build or acquire property for social housing around the State.

Credit unions, which have been desperate to secure opportunities to invest member funds in line with strict Central Bank of Ireland rules, will put in up to €100 million to purchase or build up to 450 homes through approved housing bodies that, as always, are hunting for funding.

The payback for the credit unions and their members will come via the rental stream on the properties over the following 25 years.

As the Government’s Housing for All policy aims finally to comprehensively address the ongoing housing crisis, funding remains a key stumbling block. Bank lending is still much more restricted following the 2008 financial crash. So developers have to be more creative in how they fund projects.

Funds

That applies equally for the approved housing bodies. And their commitment to a less profit-driven model makes the job all the more difficult.

For the credit unions, it is a welcome opportunity for a sector that is strictly controlled by its regulator – the Central Bank – in what they can do with members’ money. In large part, this dates back to the voluntary nature of the movement.

In most cases, certainly before the recent rapid consolidation among credit unions, management of member funds, investment and lending decisions has all been in the hands of enthusiastic volunteers with degrees of financial expertise that varies from extensive industry experience to that picked up in their credit union role.

But, to fulfil their role, they need to make a return on member savings. This has involved broadening the type of investments they need to consider.

This fund, with its Central Bank sanction, looks like a good solution for both sides of the deal at fairly low risk.

Business Today

Get the latest business news and commentarySIGN UP HERE
The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.