herald

Tuesday 12 December 2017

Toxic stockpile of empty sites faces NAMA bulldozer

NAMA is prepared to demolish unfinished buildings which it receives as toxic stock from financial institutions.

Later today, banks will receive their first notification of the kind of discounts which will be imposed on property loans.

It is expected that the five participating institutions are likely to be surprised at the size of the discount demanded by the agency.

Bank of Ireland, Irish Nationwide Building Society and EBS building society will be the first to receive so-called acquisition schedules outlining the first loans NAMA will buy and the discounted price it will pay for them.

But it is understood that the agency could demolish thousands of unfinished sites on the western seaboard and return the land to agriculture.

The bulldozing of empty homes has been taking place in the US over the past year, particularly on stock which has been foreclosed on by banks and new direct investment has been pumped into stronger neighbourhoods.

NAMA planners said that, in extreme cases, similar exercises would have to be carried out in Ireland.

While the agency is prepared to sit on assets for several years, it believes that some are more likely to return value as agricultural sites.

Earlier this month, a joint UCD/DIT report calculated that there were in fact 345,000 vacant houses and apartments.

But analysts have said that this figure is likely to be closer to 400,000 across the country.

NAMA will take a huge amount of these land and development assets out of the property market but it will only succeed if there is a strong economic recovery.

The acquisition schedules for AIB and Anglo will be sent later than the others as they are transferring the largest loans overall to NAMA.

Because they provided valuations and legal due diligence on the loans and underlying properties later.

Meanwhile, ISME, the group which supports small and medium enterprises (SMEs), said its members had no faith that NAMA would increase lending to cash-starved businesses.

It said only one in 10 of them believed NAMA would make a positive difference to lending.

ISME Chief Executive Mark Fielding said 80pc of companies claimed that banks were making it more difficult to access credit, with 55pc of businesses recently being refused loans.

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