The National Asset Management Agency has today launched a pilot scheme to offer deferred residential mortgages to first-time buyers and homeowners.
In an effort to kick-start the housing market, more than 100 properties located in 12 developments in Dublin, Meath, and Cork are being offered under the residential mortgage 80:20 Deferred Payment Initiative.
The scheme allows house buyers to pay 80% of the agreed sale price of the property upfront, with the remaining 20% expected after five years, depending on the value of the property at that point.
It is aimed at potential home buyers who may be postponing making a purchase because of concerns that house prices may fall further.
Although the scheme has been launched by Nama, and the agency owns the properties, it is not issuing the mortgages itself.
Three banks – Bank of Ireland, AIB (through subsidiary EBS), and permanent tsb bank – will participate in the pilot initiative.
Nama chief executive Brendan McDonagh said: “Based on market research which we have carried out, concern about potential decreases in house prices in the future is a significant factor for house buyers in the current market.
“We are piloting this initiative to allow some buyers, who are putting off their purchase in the expectation that prices may fall further, to buy now with the knowledge that they may not lose out even if the value of their home falls by up to 20% over the next five years.
“Together with initiatives introduced in the recent Budget, we believe that this measure will help encourage greater activity in the housing market.”
McDonagh said the initiative aimed to generate more activity in the Irish housing market and facilitate greater price discovery. Selling homes that are currently unoccupied will save money in maintenance costs and will also help to increase occupancy in developments that are currently partially-occupied, he said.
bridget.o’connell@estatesgazette.com
