Belfast Telegraph

No moves by Nama chiefs to aid Ulster homebuyers

By Margaret Canning & Charlie Weston

A property scheme by the Republic's bad bank that protects buyers from falling prices has still not been extended to Northern Ireland.

The National Asset Management Agency (Nama) offer aims to insulate homebuyers from negative equity and has been extended to 180 houses in 12 counties across the Republic of Ireland.

A Nama spokesman said the agency hoped to extend the scheme to Northern Ireland but could not say when it might happen.

Negative equity is where the value of the mortgage is greater than the value of the property. It afflicts many home owners in Northern Ireland who bought houses at the peak of the housing bubble in 2007 but now find their homes have lost as much as 60% of their value at purchase.

Called the 80:20 deferred payment scheme, Nama sets aside 20% of the selling price for five years.

Buyers who enter the scheme pay 80% of the agreed sales price upfront.

After that time, if the value of the property falls by anything up to 20%, the buyer will have a corresponding amount knocked from their mortgage.

Launched in May, it included 115 houses in three counties but the expansion boasts a greater geographical spread.

But Colin Dunwoody, a mortgage advisor at The Mortgage Shop in Bangor, Co Down, said he believed the scheme would make little difference in Northern Ireland.

"The problem is with getting a mortgage, not having some scheme in the background, though anything helps," he said.

"The people who need a 90% mortgage are finding the banks are still running scared from lending at that rate, and there is also very little competition."

So far 41 houses that were part of Nama's original pilot scheme in the Republic have been sold.

Now another 180 properties, ranging in size from two-bedroom to five-bedroom homes, in 12 counties will be added.

Prices are as low as €100,000 (£80,500).

The properties are located in Carlow, Clare, Cork, Dublin, Galway, Kerry, Kildare, Kilkenny, Limerick, Meath, Sligo and Wexford.

Three banks are participating in the scheme - Bank of Ireland, AIB subsidiary EBS and Permanent TSB bank. Of those three, only Bank of Ireland operates in Northern Ireland.

Speaking to an Oireachtas committee earlier this year, Nama chairman Frank Daly said: "If this mortgage initiative works on the basis of the pilot scheme in the Republic, we are very open to seeing if we can introduce a similar initiative in Northern Ireland with our partner banks.

"Any initiative available in the Republic of Ireland market will, where possible, be made available and tailored to suit the economic circumstances in Northern Ireland."

Nama is offering vendor finance to Northern Ireland, which means extending funds to those wishing to buy commercial property. Nama offers up to 70% vendor debt finance to purchasers of commercial property under the control of Nama debtors or receivers appointed by the agency.