What is the security on Irish BTL Residential property investments?

One of the reasons that people, including myself, have surmised is behind the very low level of repossession of buy to let property in Ireland (500 in 40,000 in arrears) is that maybe a lot of the property was secured on peoples personal primary residence.

From the survey on buy to let investments we had about 100 people who availed of the opportunity to give their email, so as to be kept in touch with on the study. Today, I emailed them with one simple question : what, typically, is the security on your BTL properties. The results are above.

Caveat : this is the results from 40 people who responded. It is a snapshot of a small part of the puzzle.

Caveat over, if this is in any way representative of the situation Mr Ponzi is in the house. Far from these people having their BTL investments secured on their family home, its more likely to have been cross secured on other property investments. If it is secured at all…Really, if this is even close to the broad picture, then we have to ask even more serious questions of the banks.

Lets pray that this is not representative.

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One thought on “What security, if any, backs loans on Irish BTL properties..?

  1. Stephen Curtis

    Very interesting Brian – the question I suppose is are those BTL mortgages secured on the investment property itself recourse or non-recourse to the borrower personally or just the property itself.

    If the majority are recourse then there is in effect a PG in place along with the ability of the bank to secure judgement mortgage against the family home, if there is equity in the family home.

    The 20% un-guaranteed is hugely disturbing if this extends across the entire BTL market

    As the banks have to reach resolutions with 15% of arrears by end of 2013 as per Central Bank targets you’d expect them to look at the BTL’s first.

    Reply

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