After months of rumour and speculation Nama have finally launched a new scheme which it hopes will kick start the property market and therefore hopefully shift some of the 10,000 + properties it has on its books.

The scheme which it is calling the “80:20 Deferred Payment Initiative” allows buyers obtain mortgages from three state-guaranteed banks – Bank of Ireland, Permanent TSB and the EBS and then buy a selected NAMA property with a guarantee that if the property has declined by up to 20% in five years, the buyers will be refunded the decline up to 20%.

Buyers have an initial choice of 115 properties in Cork, Dublin and Meath but it is understood the scheme will be rolled out to 750 properties after the initial pilot phase. Prices being asked for these properties would seem to be on the higher end of the current scale so a question must be asked if they are overpriced from the start.

Pilot Developments:

Delvin Banks, Naul Village, Co Dublin

Loughmore Square, Killeen Castle, Dunshaughlin, Co Meath

Browns Barn Wood, Dublin 22

Carrickmines Manor, Glenamuck Road Dublin 18

Cul Ard, Carrigtwohill, Co Cork

Old Quarter, Ballincollig, Cork

Drakes Point, Crosshaven, Co Cork

Brightwater, Crosshaven, Co Cork

Rowan Hill, Mount Oval, Rochestown, Cork

Inis Alainn, Carrignafoy, Cobh, Co Cork

Highfield Park Development, Ballincollig, Co Cork

Ardfield, Grange, Douglas, Co Cork

Key points

  • Protection against potential falls of 20%
  • Minimum 10% deposit required
  • Mortgages limited to PTSB, EBS & BOI
  • No price haggling
  • 80pc of the agreed sale price of the property will be paid over upfront. The remaining 20pc will only be due in five years’ time.

The scheme would seem to addressing one issue within the market i.e. a lack of confidence in house prices but at a time when many believe that in some areas especially Dublin and its surrounds the right properties (i.e. 3 & 4 bedroom houses) have already reached their level or are not far away so the need for this scheme would seem to be at least 18 months too late.

What it still doesn’t address is the huge problem of banks not lending in the first place and to us the main reason for setting up Nama in the first place was to clear the banks of their bad loans and get them lending again.

Until they manage to do this it is unlikely that the new scheme no matter how well intentioned it is will have any major impact.