More than a decade on from the financial crash, its deep-lying effects are still evident across many facets of Irish society.
Many of the lingering remnants of the recession are intangible and hidden, but others are evident in the most tangible form of all: bricks and mortar.
According to the most recently available figures from the Central Bank, Irish banks and vulture funds had 2,552 properties on their books at the end of March – a sign of the number of people who could not afford to meet their mortgage repayments and either surrendered their home or had it repossessed.
Of these, 1,986 were in the hands of Irish banks. A further 566 are in the hands of so-called “non-bank unregulated loan owners”, also known as vulture funds, or retail credit firms.
The Central Bank does not collect data on the number of homes that are lying vacant, but an analysis of four of the five major retail banks by The Sunday Business Post suggests about 1,285, or 65 per cent, of those owned by banks are empty at present.
KBC Ireland did not provide any figures despite repeated requests to do so. This suggests the number and proportion of vacant homes is higher again.
Details released by Permanent TSB last month shone a light on the number of properties still resting on the banks’ books despite efforts to move them on.
In its interim results, the bank disclosed that it had hundreds of properties in its possession at the end of June despite having sold about 1,400 units over the previous 18 months.
Of the 882 properties it held, 372 were for sale, raising the prospect of a significant portion of its remaining portfolio re-entering use soon.
In a statement accompanying its results, PTSB said: “The bank is satisfied with the progress being made to date and expects to sell the majority of these properties through various arrangements over the next 12 months.”
The bank said “approximately 60 per cent” of the properties on its books were vacant, suggesting a figure of about 530.
Most of the homes in PTSB’s possession were surrendered by homeowners under its buy-to-let voluntary surrender programme.
In 2017, PTSB announced that it would write off residual debt for buy-to-let borrowers who handed back the keys to their property in an effort to cleanse its balance sheet of long-term arrears.
As of its latest update, PTSB had non-performing loans of about €1.7 billion and an NPL ratio of 10 per cent which it said it remained committed to cutting to the “mid-single digits” in the medium term.
The scheme was an effort to resolve some of those NPL cases and it has enjoyed a degree of success in that regard.
The take-up of the scheme has led to, as chief executive Jeremy Masding said recently, a “spike” in the number of properties on its books, however. It is now having to work through those properties to try and get them off their books.
“What we did was lance the boil,” Masding said at a sitting of the Oireachtas finance committee in April when the matter was discussed.
While PTSB’s stock of homes remains higher than its peers, it’s far from alone in trying to sell properties still in its possession with all the other Irish banks in a similar position.
Asked about the number of properties it still held, a spokesman for AIB referred to figures contained in its annual report for the period to the end of December 2018. According to the report, the bank had 583 vacant family homes at that point and 45 vacant buy-to-lets in its possession.
Discussing the matter at the same committee hearing in April, AIB chief customer and strategic officer Jim O’Keeffe said it was working with the Housing Agency to move the stock of homes on.
“I accept that we have the property but I assure members that the work is ongoing to ensure we can continue to make it available to meet the housing challenge that the country is facing,” O’Keeffe said.
Given the scale of that housing “challenge”, progress on getting vacant homes back into use can’t come quickly enough for the more than 10,000 people in emergency accommodation at present.
A spokesman for Bank of Ireland said it had 62 properties on its books at the end of June, all of which were empty. Of these, 48 were primary dwelling homes (PDH) and 14 buy-to-lets (BTLs).
“All 62 would be pre-market, on-market for sale or sale agreed – we don’t hold on to properties unless essential repairs are required prior to releasing to the market,” he said.
In the 18 months to the end of June, Bank of Ireland disposed of 129 properties, including 108 family homes.
For Ulster Bank’s part, it has 90 homes in its possession split roughly equally between PDH and BTL properties having sold 22 in the past 18 months. Sixty-four of those properties are vacant with the remaining 26 occupied.
In addition to the retail banks and vulture funds, Nama has about 40 homes, or “habitable vacant residential units”, as Finance Minister Paschal Donohoe described them in a recent response to a parliamentary question.
This figure, he added, didn’t include properties currently on the market or for which a sale had been agreed.
“Nama is currently working with its debtors and receivers regarding appropriate strategies for these 40 units, which includes assessing the suitability of the units for social housing,” he added.
David Hall, chief executive of the Irish Mortgage Holders Organisation, said he suspected the true figure of vacant homes on banks’ books was considerably higher and described the situation as an “embarrassment”.
“It’s embarrassing, it is immoral with [homeless] people in hotels and Airbnbs,” he said.
Hall is planning to snap up hundreds of such properties as he expands the range of homes his not-for-profit approved housing body (AHB) iCare is acquiring.
Hall told The Sunday Business Post that iCare is poised to make an offer for ten KBC properties in the coming days as a pilot project for vacant homes.
Over time, he said it hopes to buy up to 500 vacant properties from banks.
“We’re doing a pilot scheme with KBC at the moment on vacant homes. So what happens is, when we get empty properties from AIB and KBC, whom we’re working with at the moment, we send them to the Housing Agency. They [then] go to the local authorities which pre-approve them for social housing and basically commit that they will put people into them.
“They’ve a very good system in the Housing Agency at the moment for that, so we’ve got a pilot scheme ongoing [and] we’re about to make an offer on ten homes. [We will target] everything that’s eligible . . . I think there’s 500 of them there [to be bought],” he said.
iCare has official partnerships with AIB and KBC at the moment, but Hall said PTSB has also drawn up a list of vacant properties at its request.
Using an “ultra-conservative” estimate, Hall said at least 2,000 of the 10,173 adults and children in emergency accommodation at the end of June could be housed if the banks’ vacant homes were converted into social housing.
The pilot scheme represents iCare’s first foray into buying vacant homes, having already acquired 86 occupied homes under the mortgage-to-rent (MTR) scheme since its launch.
Under the mortgage-to-rent scheme, launched in 2012, borrowers in arrears can remain in their homes on a rental basis with the ownership of the property ceded to an AHB.
“We’ve bought 86 occupied homes that are mortgage-to-rent where people who had mortgages couldn’t pay the mortgages, we’ve converted them to social housing now and we’re buying 30 more in September so by the end of this year we’ll have 140 mortgage-to-rent properties and now we’re starting a parallel process with vacant homes,” Hall said.
iCare has struck deals for a total of 550 mortgage-to-rent properties that it will acquire over time.
Hall’s AHB isn’t the only body buying vacant homes – the state is in the same game.
As part of the government’s Rebuilding Ireland scheme, a €70 million fund was made available to the Housing Agency in 2017 to buy properties owned by financial institutions that had been vacant for more than 12 months.
The idea was to replenish the fund as units purchased by the agency were sold on to AHBs.
In total, the government aimed to snap up 1,600 homes by the end of 2020.
A spokesman told The Sunday Business Post that at the end of March 2019, the Housing Agency had bids accepted on 806 units with contracts closing on 639 units and that its original target remained in place.
Of these, 413 were occupied at the end of March.
“The Housing Agency is actively engaged with banks and investment companies in relation to this acquisitions programme, and the target of acquiring 1,600 units by the end of 2020 remains in place.
“Properties purchased must be brought up to the required standards and therefore may require works to make them suitable for use as social housing. The majority of the properties purchased by the fund are distressed assets that are vacant and in need of remediation or upgrading. Each property undergoes an assessment by the Housing Agency before the works are carried out,” he said.