The National Asset Management Agency, Nama, is now effectively one of the twenty largest property portfolios in the world with €80bn worth of assets within its control. The annual report for 2010 has just been published this week. The report also includes dealing for the first two quarters of 2011. Click here to download the Nama Annual Report 2010.
Some of the key figures confirmed that 850 individual borrowers have now gone into Nama. Of these, three borrowers have individual loans exceeding €2bn!
In accounting terms, Nama’s report shows an operating profit of €305 million, however, look a little closer and paper losses on loans of €1.4 billion.
What does this Nama deal mean for buyers?
Significantly for buyers, the agency has just made available, for the first time, a preliminary list of properties that are currently subject to enforcement action. The list comprises close to 500 residential and commercial properties and sites in Ireland and the UK. Click here to access the download the List of Nama Assets. Not all of these properties will be available to purchase.
Nama Funding Solutions – Negative Equity Mortgages
Nama are also proposing to offer funding solutions to buyers of its property by way of a negative equity mortgage. This is essentially an attempt by Nama to deal with the two main obstacles for would-be buyers; firstly, fear of likely further drops in the short and medium term, and secondly, difficult accessing credit in the current market. The offering will be in association with the pillar banks, Bank of Ireland and AIB, and most likely Permanent TSB. Buyers will really need to interrogate the purchase price to ensure that the protected element is not being recovered in the price. Also, the mortgage lenders should not discriminate by unfavourable mortgage rates or terms when dealing with these buyers. Without the full information, there is a danger that it could start to resemble a hire purchase agreement with covertly onerous APRs – buyers are best advised to read the small print! My greatest fear here is that first-time buyers are being targeted for one and two bed apartments that they will outgrow as soon as they decide to get married or start a family – how easy will it be to sell and trade up? My guess is that buyers going into these apartments are likely to be stuck there for the full cycle term (typically 7 years) after recovery.
My greatest fear here is that first-time buyers are being targeted for one and two bed apartments that they will outgrow as soon as they decide to get married or start a family – how easy will it be to sell and trade up?
Buyers have a lot to contend with this week, all this Nama activity comes in the week when the fourth monthly CSO residential property index records further drops.
Despite an increase of 0.3% in May 2011, property in the capital recorded a drop 2.4% in June. Outside Dublin, property fell by 1.9%.
This index is based on mortgage information captured from Bank of Ireland and ICS, AIB, the EBS, Permanent TSB, KBC, National Irish Bank and the Irish Nationwide BS.
While the data captured is far from ideal and falls short of the much-needed achieved house price data that the market is crying out for, it is the most reliable indicators that we have for mortgaged transactions. Buyers should note that cash transactions are not factored into these calculations.
It has been a phenomenally busy week for the Irish market, if any buyers need help deciphering this and other news, you are welcome to email your comments or queries to us at email@example.com.