NAMA has finally announced that it will guarantee a 20% portion of the mortgages for 175 properties in a bid to kickstart the housing market.

The initiative, previously referred to as a negative equity mortgage (not to be confused with a different product under a similar name, offered to struggling homeowners to facilitate trading up) was due to be launched this time last year, when NAMA promised 750 properties, suitable for first-time buyers.  Our understanding is that if the scheme is successful, it will be extended.

While this is a move to motivate buyers, who are currently sitting on the proverbial fence, more questions will need to be answered before buyers take the leap.  As with all initiatives, the devil will be in the detail.  A lot will depend upon the valuation of the units (protecting 20% over five years will not help if the valuation is to high initially).  Furthermore, the quality of the units and the suitability of their locations must looked at in the context of first-time buyers.  Will there be a market to sell on these apartments (remember that 80% of NAMA’s residential stock is apartments or duplexes) in five years time?

I will be writing about this initiative, how it is to work and what effect it will have on the market (little, I suspect) in next Thursday’s Metro Herald.  For what it is worth, I will be suggesting an alternative that might actually be worthwhile to buyers.  In the meantime, I would urge buyers to consider the long term suitability of apartments for their lifestyle and future plans.

Any buyers considering this are welcome to contact us on info@buyersbroker or Tel:  +353 (0)1 4428 035 for full details and advice.

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