First-time buyers will benefit as agency poised to offload homes
THE move by state property agency the National Asset Management Agency (NAMA) to sell off the residential properties on its books could be good news for first-time buyers, property experts said yesterday.
Those who take up the deal could end up with more favourable mortgage terms.
Details of how the process would work are still being put together.
But it is likely that NAMA will drip release properties for sale through estate agents.
It will need to be careful not to flood the market at any one time with too many keenly priced properties.
NAMA controls the loans attached to thousands of residential-property units, which are mainly in Dublin.
Anyone who wants to buy a NAMA apartment or house would view the property through an estate agent and if they agree to buy, could get a special mortgage deal.
The mortgage would still be arranged through a domestic bank, but if NAMA gets its way, it may be able to part-fund the banks issuing mortgages for properties that the agency is selling.
It is proving difficult for many first-time buyers to get approval for a mortgage at the moment, with banks demanding deposits of up to 30pc of the value of the property.
However, NAMA chairman Frank Daly revealed earlier in the week that the agency was studying ways it could help banks to fund the mortgages for residential properties being sold from NAMA's portfolio.
A spokesman for the agency said yesterday that it had been working for the last few weeks on plans to support banks that issued mortgages for when NAMA homes were sold.
Proposals being looked at include part-funding deposits through the banks, and sharing some of the risk banks take on when issuing residential mortgages. This could be done by offering banks guarantees for mortgages issued to buyers of NAMA apartments or houses.
The agency has around €1bn in funding on its balance sheet.
The arrangements being looked at by NAMA may mean that someone who buys one of the properties the agency controls could benefit from more favourable mortgage financing than if they were able to arrange their own mortgage.
It could also mean that people who have previously been turned down for a mortgage may qualify for a home loan. Daft.ie economist Ronan Lyons said the prices for apartments and houses set by NAMA when it released them would be key, as the prices would be used a reference point for the rest of the market.
This means it will be important it gets its prices right because if it sets them too low it will send prices across the market down further.
Setting prices too high will mean few buyers, despite NAMA offering help with mortgage funding, Mr Lyons said.
Annette Hughes, economist with DKM Consultants, said lending restrictions were one of the main things holding back the mortgage market.