News Irish News

Wednesday 25 April 2018

Banks have stockpile of 1,500 repossessed properties

Banks have a stockpile of property
Banks have a stockpile of property

BANKS and building societies are sitting on a massive portfolio of more than 1,500 repossessed homes and apartments that they either can't or won't shift on to the open market, it emerged last night.

The revelation comes as experts predict that house prices in Dublin will surge by as much as 15pc this year -- primarily because of a shortage of family homes.

An unprecedented wave of repossession actions in the courts last summer means that lenders now hold hundreds of millions of euro of private homes, apartments and buy-to-lets.

These were either seized by court order or voluntarily surrendered by distressed borrowers who couldn't pay their mortgages.

The new figures are revealed in the report of the Expert Group on Repossessions. The group was set up on the orders of the troika, which criticised Ireland's "abnormally low rate" of house repossessions.

It does not give a breakdown of where in the country the properties

are or whether they are currently idle or rented.

It is believed that the financial institutions are in the process of selling some Dublin homes but country properties will be difficult to offload.

The expert group's report, which was handed to Justice Minister Alan Shatter last night, reveals that between May and September last year alone, legal proceedings were started to enforce repossessions on private dwellings in 1,830 cases.

Court proceedings were concluded in 361 cases during the quarter and in 89 of them the courts approved repossession or sale of the property.

This renewed wave of legal actions meant that by the last day in September there were 1,050 private dwellings in the possession of lenders

A total of 209 private properties were taken into possession by the banks during the period.

While 158 dwellings were disposed of, this still left the lenders with 1,050 private dwellings on their books, including properties they had taken over previously.

It's a similar story on buy-to-lets, where the banks were left with a residue of 516 investment properties that had been either seized, surrendered or simply abandoned.

Meanwhile, property prices in the capital are set to rise once again by up to 15pc this year, a brace of new reports from leading estate agencies predicts. They warn that the conditions which have caused a shortage of homes for sale in 2013 will continue this year.

Lisney's director of residential David Bewley thinks lenders will act against even more distressed borrowers this year.

"With one in five mortgage holders behind in repayment, it is very likely that repossessions will increase in 2014," he said.

The Expert Group on Repossessions did not suggest that any legislative changes but made a series of very general recommendations.


It said that significant efficiencies could be achieved through more effective case management by lenders, more harmonised documentation standards and a more structured framework for borrowers in repossession proceedings.

The Government last night said it wanted to see the recommendations implemented by the banks and the courts.

A spokesman said: "The lenders and the Courts Service, in particular, would do well to note these recommendations."

Jerome Reilly, Peter Flanagan and Fionnan Sheahan

Irish Independent

Today's news headlines, directly to your inbox every morning.

Editor's Choice

Also in Irish News