The National Asset Management Agency (NAMA) has announced that that the 80:20 Deferred Payment Initiative will be closed to new entrants with effect from 31 May 2014.
Purchasers who have already bought houses in the scheme, together with those who contract to buy a qualifying property before the end of May, will continue to benefit from the initiative, which protects buyers from price falls of up to 20% for up to 5 years after purchase.
NAMA Chief Executive Brendan McDonagh said: “The 80:20 Deferred Payment Initiative has achieved its objectives. €44 million has been generated from the sale of houses included in the 80:20 Initiative. The initiative was only ever intended as a short-term measure to remove the fear of negative equity for buyers at a time when there were few residential property transactions in the Irish market.
“Feedback from buyers suggests fears of price falls have abated considerably in recent months. Many buyers cite evidence from the CSO and the market that house prices are rising in Dublin and stabilising in other parts of the country.
“The fact that buyers are no longer actively seeking protection from price falls is a welcome sign that the housing market is stabilising and returning to more sustainable, normalised conditions.”
NAMA launched the 80:20 Deferred Payment Initiative in 2012 to generate more activity in the Irish housing market and facilitate greater price discovery. The Initiative will have been operational for two years by May 2014. To date, 224 homes that were included in the Initiative have been sold since launch, with some developments selling out of all participating properties. Of those properties sold to date, 50% of the purchasers have availed of the 80:20 Deferred Payment Initiative through one of the participating mortgage providers.
The protection available under the 80:20 Deferred Payment Initiative will continue to be made available to buyers who sign contracts before the end of May 2014.