Businessman Dermot Desmond said funds were ‘having a laugh at Ireland’
Almost 150 new homes in Co Kildare, worth €50m, are to be leased by the State from an investment fund — despite a Government commitment to end the practice.
Kildare Co Council agreed to lease more than 200 homes last month, with most of the units owned by property investment fund and developer Ardstone.
Lease agreements with investors have been criticised by opposition politicians for representing poor value, and were once labelled “a criminal waste of money” by businessman Dermot Desmond.
Meanwhile, land registry files show 257 homes in new estates in Kildare were bulk-bought last month in nine transactions worth more than €90m.
Some say bulk-purchase deals make it more difficult for first-time buyers and families to compete in a market already blighted by supply issues.
Company records seen by the Sunday Independent show 38 homes at the new Belin Woods development in Newbridge are to be leased by Ardstone to Kildare County Council for the next 25 years.
The Dublin-based company has developed a portfolio of homes in and around the capital.
Ardstone made an application last month to register 38 homes at Belin Woods, land registry records show.
According to the Property Price Register, the 38 units sold for €11.6m. This price rises to €13.2m when Vat is considered.
The council said it plans to lease a further 48 homes in the same development, and is working with Ardstone and developers Glenveagh on the delivery these units.
They are expected to come on stream in the second quarter of this year, with the lease agreement to be signed when the homes are ready.
Belin Woods is a development of three- and four-bedroom homes near the River Liffey and within walking distance of Newbridge town centre. On average, the 38 homes purchased last month cost €306,918 each.
A spokeswoman for Kildare County Council said it entered a 25-year lease agreement with Ardstone under the enhanced leasing scheme “as part of our commitment to exploring all options for the provision of social housing in the county”.
This scheme allows local authorities to enter long-term leases for and pay up to 95pc of an agreed market rent which is reviewed every three years.
At the end of the lease, “the units will be yielded to the lessor with vacant possession”, the council spokeswoman added.
Kildare County Council also agreed to lease 60 homes from Ardstone at another Glenveagh development in Leixlip, the Sunday Independent understands. The 60 units at Barnhall Meadows sold for €24.4m (including VAT) last month, according to the Property Price Register.
Ardstone declined to comment last week. Glenveagh said most of the homes sold in bulk at Belin Woods and Barnhall Meadows were either Part V units sold to the council for use as social and affordable housing, or “units which are leased to Kildare County Council and which were sold to Ardstone — who will manage the units under lease to Kildare County Council”.
Part V relates to a section of the Planning and Development Act that requires a portion of a new development to be reserved for social housing.
In 2021 businessman Dermot Desmond wrote to Housing Minister Darragh O’Brien and described the practice of local authorities entering long-term leasing arrangements with investment funds as a “criminal waste of money”.
Desmond claimed investment funds were “having a laugh at Ireland”.
O’Brien later said he was aware of issues with long-term lease agreements for social housing, adding that he had opposed them before he entered government and was committed to phasing out the practice before the next general election.
Kildare County Council said it has also entered into separate agreements directly, or in support of approved housing bodies, for the delivery of homes at other new estates in the county.
These include 42 units at The Court, Westfield, Leixlip; seven units at Walker’s Gate, Kildare; 10 units delivered in Walker’s Gate; and 15 units at Mullen Park, Maynooth.
Homes were purchased in bulk in each of these estates last month. Ardstone was not involved in these deals.
Property Price Register files show 20 units at Westfield were purchased for €6.4m. Seven units were sold at Walker’s Gate for €2.2m. The 15 units at Mullen Park fetched €3.6m.
The council said the schemes are being delivered with the approval of the Department of Housing “under various funding models including CALF and Part V”.
Capital Advance Leasing Facility (CALF) helps AHBs access private or Housing Finance Agency (HFA) loans to purchase or build homes so they can be made available for social housing.
Further listings show another 40 units at Walker’s Gate sold in another transaction last month for €15.8m.
Another 38-unit deal for homes at Belin Woods was completed for €14.9m.
Two other transactions for a combined 39 units in estates elsewhere in the county were completed for a total of €10.5m.
The Department of Housing said Kildare County Council is one of 19 local authorities allocated a long-term leasing target of 348 social houses to be delivered over the lifetime of the Housing for All plan, and that target is almost fully subscribed. Lease numbers will be tapered between now and 2025.
A spokesman said planning measures introduced in 2021 restrict the practice of bulk purchasing by institutional investors and “almost 16,000 homes have been ring-fenced for individual buyers and restricted from bulk buying or multiple sales to a single purchaser”.
“This included 752 homes in Kildare,” he added.