Wednesday 13 December 2017

State may buy homes to lease to councils

Paul Melia and Colm Kelpie

The Government is considering buying homes from developers and receivers and leasing them to local authorities in an effort to reduce housing waiting lists.

Finance Minister Michael Noonan said the State could utilise a model developed by Nama whereby it purchases homes directly from builders, before leasing them to councils or housing associations.

At the launch of Nama's annual report, Mr Noonan said councils that were "short of resources" could be given another option to provide homes to the 90,000-plus people on waiting lists.

"[A Nama subsidiary] actually purchases houses from developers and leases them to local authorities. Local authorities...are short of resources and the fact that they could lease rather than purchase from Nama was very significant. The model is interesting as well."

He added that Housing Minister Simon Coveney was looking to see if it gave another "potential response" to the "supply problem" in housing. A spokeswoman for the minister said "all options" were being considered.

The comments come after the Irish Independent revealed this week that none of the 1,700 "shovel-ready" social houses announced in May last had been built. Of 2,700 units approved by the Government between May 2015 and this January, just 26 are under construction with most still at planning or design stage.

Nama has established a special purpose vehicle called the National Asset Residential Property Services Limited, which takes ownership of properties where there is an established demand and leases them on a long-term basis to an approved housing body or local authority.

It has spent €160m on these properties, off the State's balance sheet, delivering around 1,500 social housing units. Local authorities are free to buy homes on the open market and, last year, some 1,160 were acquired.

The Housing Agency is also buying properties on behalf of councils.

It has recently purchased 172 units from AIB and Bank of Ireland, at a total cost of €24.9m. Most were buy-to-let properties, and the average price paid was €144,965.

Housing Agency chief John O'Connor said it had opened negotiations on portfolio sales to see if any units were suitable for social housing.

"We could potentially purchase hundreds of properties," he said. "They're [sellers] seeking market value, and if you're buying a number you can get a discount."

Irish Independent

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