Discount of up to 10% expected on bulk-buy social houses

Housing Agency to spend up to €70m on acquiring private houses and apartments

The Government’s Housing Agency will target portfolios of distressed properties held by banks. File photograph: Getty Images

The Government’s Housing Agency will target portfolios of distressed properties held by banks. File photograph: Getty Images

 

The Government’s Housing Agency expects to achieve discounts of up to 10 per cent on the market value of private homes it plans to bulk-buy for social housing.

The agency was last month allocated €70 million under the Rebuilding Ireland housing action plan to buy homes, which will be used by local authorities and voluntary housing bodies for tenants on social housing waiting lists.

It plans to assess about 1,000 houses and apartments for sale over the next two years to determine their suitability to buy for social housing, and expects to buy at least 400 properties a year by 2020.

Agency chief executive John O’Connor said he expected the first tenants to be moving into properties within the next two months and that more than 200 homes would have been bought by the agency by the end of the year.

The agency will target portfolios of distressed properties held by banks and investment companies, primarily private equity funds, to deliver social housing across the State. The homes would generally be former buy-to-let properties, but, Mr O’Connor said, they would not buy any houses which had existing tenants.

Best price

“We are expected to get the best value for the State and, because we’ll be making bulk purchases, we’d be expecting discounts of 5 to 10 per cent on the properties.”

Average prices are expected to be in the region of €150,000, but could be up to €300,000 in Dublin.

The €70 million would be a rolling fund, he said, which would be replenished as properties were sold on to housing bodies and local authorities. The scheme would primarily be aimed at approved housing bodies who could access “off balance sheet” funding, Mr O’Connor said.

Becoming involved

Simon Brooke

“We intend to deliver 1,500 homes over the next three years, which will involve us building new housing, but we expect it will also involve acquiring houses through this scheme.”

The involvement of the housing agency would allow tenants to be allocated homes more quickly, Mr Brooke said.

“The advantage of the Housing Agency is that they have a pool of cash, which allows them to acquire properties more quickly that we would be in a position to.”

While Clúid would be interested in acquiring full portfolios of housing, Mr Brooke expected the houses would be spread over an area, rather than in complete estates.

Clúid would be particularly interested in acquiring houses in Dublin, he said.

“There is no doubt that the Dublin area is where the greatest housing shortage is, so this will be one solution to the housing crisis we would be interested in pursuing in Dublin.”