NAMA will probably extend 'successful' house-sales scheme
THE National Asset Management Agency will probably extend a controversial scheme to sell properties together with a taxpayer-funded guarantee that protects the buyer against price falls, NAMA chairman Frank Daly said.
NAMA said in May that it would introduce the scheme for around 115 houses and extend the scheme if it were successful.
Yesterday, Mr Daly said the bad bank had sold around 40 houses. He described that level of sales as a "success" and added that the scheme would probably now be extended.
The scheme met with a mixed response when it was unveiled. Supporters said it was an imaginative way to kickstart a stalled market while critics said it distorted the market by offering a state-funded guarantee to buyers that made it impossible for other sellers to compete.
Called the 80:20 Deferred Payment Scheme, it protects buyers from negative equity in any price plunge and is restricted to first-time buyers and movers.
Under the deal, NAMA sets aside 20pc of the selling price for five years.
After that time, if the value of the property falls by anything up to 20pc, the buyer will have a corresponding amount knocked from their mortgage.
Mr Daly was critical of the Government's failure to introduce a new property price database that will eventually allow citizens to find out how much was paid for a house.
The Government said last September that the Property Services Regulatory Authority would begin publishing the cost of residential houses by the end of 2011 -- a deadline that was later extended. Seven months into 2012, this has still not happened.
"The sooner this is published the better," said Mr Daly, who also called for the database to be extended to commercial property. "The information is there; it is just a matter of putting your mind to it," he added.
NAMA will report an operating profit after impairments "in excess" of €200m when it publishes results later this month, he added. He declined to specify the impairments, making it difficult to know whether NAMA would post a profit or loss at operating level.
Mr Daly said the bad bank was able to co-operate with around two-thirds of the developers on its books. While insisting the developers who co-operate had to make a "significant adjustment in lifestyle", he admitted that NAMA had no criterion and had not told indebted developers that they could not have private health care or send children to private schools.
He reiterated his view that the housing market was showing signs of stability in some parts of Dublin. "There are encouraging signs in Dublin, there are more encouraging signs in parts of Dublin," he said.
Speaking in a private capacity, the NAMA chairman described the deal reached by Europe's leaders last week as "a very positive" development. "For Ireland, there can be nothing but positive consequences," he added.