Sunday 25 March 2018

Buy-to-lets in arrears now on banks' hit list


BANKS are gearing up to move against troubled buy-to-let investors in the next wave of the debt clampdown by financial institutions.

The Irish Bank Resolution Corporation (IBRC) is assembling a panel of receivers, which it will appoint to properties behind the estimated 2,100 buy-to-let mortgages on its books where necessary.

The bank, formerly known as Anglo, inherited the properties from its merger with Irish Nationwide. Now that major developers have been dealt with, either by Nama or by the bank itself, the IBRC has turned its attention to the next layer of debtors, which include small-time speculators and residential investors.

It is understood the IBRC is creating a panel of up to five receivers on contracts of up to two years to manage the buy-to-let portfolio. It has invited tenders for the business.

Sources at the bank claimed the advertisement did not mean that it intended to put 2,100 properties into receivership. The bank is understood to be assembling the panel for possible appointment in the future. The panel system -- which is used by Nama -- is believed to be the most cost-effective way of appointing receivers.

The latest figures from the Central Bank paint a worrying picture of the country's buy-to-let mortgage book. Addressing the Irish Bankers' Federation's annual conference two weeks ago, Fiona Muldoon, of the Central Bank, revealed that 48,000 buy-to-let mortgages -- equating to debt of €13bn -- were now in financial difficulty. She berated the country's banks for failing to do more to address the problem.

Bank of Ireland and AIB also have substantial buy-to-let portfolios. BoI's buy-to-let book is €7bn -- a quarter of its total mortgage book in this country -- about 14 per cent of which is in arrears.

It has appointed receivers to more than 500 properties and repossessed 85 in the first half of 2012, although this figure is expected to increase by the end of the year. AIB's buy-to-let mortgage portfolio was worth €9bn as of June last year.

Sunday Independent

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