Tuesday 20 March 2018

Hall in €500m bid to stop eviction of buy-to-let tenants

Not-for-profit body plans to purchase distressed properties

David Hall: ICare founder wants to keep families in situ. Photo: Tony Gavin
David Hall: ICare founder wants to keep families in situ. Photo: Tony Gavin
Maeve Sheehan

Maeve Sheehan

A not-for-profit housing body is in advanced talks with several banks to secure €500m backing to buy rental properties in arrears to prevent tenants being evicted.

ICare, which has already secured €100m from AIB to protect distressed mortgage holders, is preparing to move into the buy-to-let sector as banks prepare to clear indebted landlords from their books.

Former Bank of Ireland governor Richard Burrows is understood to be among several financial players advising ICare in a voluntary capacity on securing investment and restructuring loans for distressed borrowers.

The debtors' advocate, David Hall, who launched ICare last month, confirmed he is in talks with several lenders to move into the buy-to-let sector.

The aim, he said, is to bring buy-to-lets under the ownership of the not-for-profit body. It will work to keep tenants in situ and families in their homes "rather than have them bought by investors who will sell the properties and have tenants evicted", Mr Hall said.

"I am actively pursuing mechanisms that will prevent the sale of family homes to vulture funds in the future. In parallel with that, a second fund is being sought to bid for the upcoming sales of buy-to-let properties that are to be offloaded by banks in the coming months," he added.

A large tranche of buy-to-lets is expected to be put on the market as banks prepare to offload thousands of rental properties in arrears to clean up their balance sheets.

More than 14,000 rental properties in Ireland are more than two years in arrears, owing a total of €4.2bn to lenders, according to the Central Bank.

The sales are expected to attract vulture funds and investors, creating uncertainty for tenants. Rents have spiralled in urban areas, particularly Dublin. Homeless organisations say rental properties being sold off by receivers acting for banks has exacerbated the capital's accommodation crisis.

The Circuit Court was told last week that a young mother-of-two returned from work to find her rented home boarded up and her family on the street after a notice to quit from her landlord. In that case, the property was being refurbished rather than sold.

ICare went live last month, using its €100m AIB loan to buy back properties from distressed mortgage holders.

The first phase targets homeowners in arrears who qualify for social housing. They have the option of leasing their home from ICare and buying it back in the future, at the price the body paid for it.

However, the majority of the 30,000 homeowners who are more than two years in arrears and at high risk of losing their homes do not qualify for social housing.

ICare is also working on a scheme to buy these loans from lenders, with a view to restructuring the loan to make payments less onerous for the mortgage holder.

In both cases, any residual debt is written off by the bank. ICare's scheme applies to customers of AIB, EBS and Haven who are in long-term arrears

Other banks have also announced 'mortgage to rent' initiatives, including PTSB.

Sunday Independent

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