The Banking & Payments Federation Ireland (BPFI) admitted it can’t confirm whether homes repaired under the state mica scheme will qualify for mortgages in the future. Affected homeowners say this uncertainty means future buyers may be deterred from purchasing a home rebuilt under the scheme.
The organisation said, in a document seen by The Ditch, that while homeowners can secure mortgages based on the certificates from the Defective Concrete Blocks Enhanced Grant Scheme, future buyers will likely need additional proof.
“Assurances regarding the future mortgageability of properties remediated under the grant scheme cannot be given by the banking sector alone,” said a spokesperson for BPFI, which represents lenders such as AIB, Bank of Ireland, and PTSB.
The organisation said anyone wishing to buy a home repaired under the scheme will need to hire their own surveyors, engineers, valuers and other experts should they wish to apply for a mortgage – even if the previous owner was issued a certificate by government declaring the property is structurally sound.
The Ditch has reported members of Engineers Ireland believe the state's standard for assessing mica redress grants is neither scientifically grounded nor appropriate – and that homeowners are being forced into cheaper remediation works and denied appropriate repairs for their property.
'Assurances cannot be given by the banking sector alone'
The Banking & Payments Federation Ireland last December said it cannot guarantee future mortgages on properties remediated under the €2.7 billion defective concrete blocks scheme.
Though BPFI members “have confirmed their willingness to lend based on the certification provided and the professional opinion provided by others in the conveyancing process”, this is no guarantee remediated properties will qualify for future mortgages.
“Assurances regarding the future mortgageability of properties remediated under the grant scheme cannot be given by the banking sector alone,” the organisation wrote last December in a letter to an affected homeowner.
“Future mortgageability is dependent on the sign-off and certification by others of remediation works under the grant scheme. It requires assurances by engineers, valuers, surveyors, insurers, conveyancing solicitors and any other party involved in the conveyancing transaction process.”
The BPFI has requested the Department of Housing to establish an "oversight committee" to address these issues. But it is unclear how the committee will resolve technical uncertainties surrounding remediated properties that have been outlined by members of Engineers Ireland.
A letter sent by Damien Owens of Engineers Ireland to the Central Bank of Ireland explained these uncertainties around future assessments of remediated properties. Pre-purchase surveys on these homes are described as unpredictable, with outcomes "difficult to accurately predict" even "years, or decades, into the future."
The letter also noted significant issues with the current assessment standard for defective concrete blocks. "Many engineers" view it as "no longer fit-for-purpose," prompting Engineers Ireland to call for a revision by the end of 2024.
“The completion of this review is both essential and urgent,” wrote Owens.
A spokesperson for the Department of Housing told The Ditch that government has called for “a fair and consistent approach” to be taken by the banking sector with customers dealing with the effects of defective concrete blocks on their houses.
“The Banking & Payments Federation Ireland have confirmed to the department that the industry position regarding mortgageability of remediated houses under the Defective Concrete Blocks Grant Scheme is that once a certification of remediation is supplied, as part of the scheme, then the house will be treated in the same manner by them as any other home.”
A BPFI spokesperson told The Ditch that its members are willing to consider mortgages for properties remediated under all five options of the grant scheme. “This applies not only to current homeowners but also to future sales, mortgage switches, and top-ups on remediated properties,” they said.
