NAMA CEO speaks to Irish Council for Social Housing

Housing Agency reviewing NAMA database to identify units that may be suitable for social housing

Based on the latest due diligence information of loans acquired analysed by the agency, NAMA is linked to just over one in five unsold newly built residential units across the country according to the agency’s Chief Executive, Brendan McDonagh.

Mr. McDonagh was speaking at a Conference hosted by the Irish Council for Social Housing in Galway today.

The majority of the residential units which are not linked to NAMA are expected to be linked to loans held by non NAMA banks. Of the residential units linked to NAMA loans, approximately 80% of the total analysed to date are apartments/duplexes.

Mr. McDonagh also revealed that that the Housing and Sustainable Communities Agency (HSCA) is onsite in NAMA’s offices reviewing the database of residential properties linked to NAMA in order to identify residential units that it might regard as suitable for social housing purposes.

He said that it was a priority of the agency to prepare initiatives with all the players in the housing market to “monetise” NAMA’s housing stock. This included, he said, initiatives with the ownership sector, the private rented and managed market and the social housing sector.

However Mr. McDonagh warned that it was likely that many NAMA linked residential units may not be suitable for social housing “due to type of property, its location, actual demand in the particular geographical area or policy concerns of any over concentration of social and affordable housing in the particular location.”

Mr. McDonagh also explained that NAMA’s attitude was not the sole determinant as to how residential units can be put to use: “borrower/receiver intentions play a part, and legal issues have to be managed. Property is not a simple asset and the whole legal system around registration of title is archaic. These and other matters can have an effect on the ability of NAMA to make residential units available for social housing and on the timeframe within which this may happen.”

Mr. McDonagh said that NAMA was committed to pro-active involvement in opportunities where specific units within a NAMA asset have been identified as suitable for social provision and, by working with the various stakeholders, to ensure the transfer of those units as expeditiously as possible. He instanced the purchase of 58 apartments at Sandyford, from a NAMA-appointed receiver, by the Cluid Housing Association, as an important working example of this strategy. Smaller numbers have also been sold to other Housing Associations by NAMA debtors.

In relation to making housing available for acquisition, he said that NAMA must take all steps necessary or expedient to protect, enhance or realise the value of assets: “NAMA is pragmatic in this regard in the context of current market conditions and economic circumstances.”

Speaking on the outlook for the residential market, Mr. McDonagh described the outlook at “more clouded than for the commercial market, not least because it is more closely linked with the real economy and the overall outlook for employment, net pay and interest rates.”

In relation to NAMA’s previously announced plans to introduce a deferred payment scheme, Mr. McDonagh said that the Agency hoped to trial the initiative on a phased basis with up to 750 residential properties in Q4/2011 and early 2012. He said the Agency regarded the initiative as a short term measure and would only utilise it “as long as we have use for it and there is market support for it.”