Wednesday, 27 March 2019

Questions (112)

Eoin Ó Broin

Question:

112. Deputy Eoin Ó Broin asked the Minister for Finance the full cost of the social housing units leased from the National Asset Residential Property Services, NARPS; the cost of the initial loans purchased by NAMA; the cost of purchasing the units by NARPS; and the full length and cost of the leases. [14429/19]

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Written answers (Question to Finance)

I wish to advise the Deputy that NARPS was established by NAMA as a means of expediting social housing delivery. It purchases suitable houses and apartments directly from NAMA debtors and receivers at market value and leases them to local authorities (LAs) and Approved Housing Bodies (AHBs). This allows social housing bodies with limited capital funding to obtain immediate access to high-quality housing via long term leases and has proven to be a very effective method of social housing delivery.

I am advised by NAMA that NARPS purchases properties, for which demand has been confirmed by LAs and AHBs, directly from NAMA debtors and receivers. The prices paid by NARPS are based on prevailing market rates confirmed by independent valuations at the time of the sale. I am advised that NARPS has invested approximately €210m in the purchase of suitable properties from NAMA debtors and receivers.

I am advised that it is not technically possible to differentiate and assign the portion of the cost of the acquired loans which relate only to the NARPS units. Many of NAMA’s acquired loans were collateralised by multiple properties and the NARPS units form part of the collateral to loans along with other units and other properties.

NARPS properties are leased to LAs and AHBs under standardised lease terms. Each NARPS lease term is 20 years and 9 months. I am advised that rents are agreed directly between NAMA and the Department of Housing, Planning and Local Government and are typically set so as to fall within a range of 78% to 83% of prevailing market rents at the time of the lease.

NARPS lease rental income for each financial year is set out below. This information is available in NARPS’ published annual accounts.

Year

Lease Rental Income

€'000

2013

54

2014

768

2015

3,626

2016

6,461

2017

10,466

I also wish to advise the Deputy that, under the terms of the current NARPS lease, the LAs/AHBs have the option to purchase the leased properties during the fourteenth year of the lease at a discount. Whether they decide to do so is entirely at their discretion; it is not at the discretion of NARPS.