'Toxic Assets' Fears Follow Talks

The property market could collapse in The North if plans to dump 'toxic assets' are fulfilled.

Following high level cross-border talks yesterday, there are fears today that property values will nose-dive if the Irish Republic's new toxic assets agency 'dumps' developments on the market.

Following the talks in Dublin, Stormont ministers have warned against the move which they said would leave Northern Ireland swamped with repossessed homes and offices - known as 'toxic assets'.

The idea was raised at the meeting of the North/South Ministerial Council in Dublin where a joint policy with Stormont was set out.

Taoiseach Brian Cowen said there were concerns about the number of Northern Ireland properties which will be taken over by the Republic's National Assets Management Agency as part of the plan.

The agency was set up to recoup nationalised bank losses for the Irish Republic through selling off developments that collapsed during the property crash.

"Obviously some of these assets are located in the Republic, in Northern Ireland and other jurisdictions as well," he said.

"It's important that we fully agreed in our discussions that both (finance) ministers would meet to consider the implications over the period ahead.

"It's obviously a matter of co-ordinating policy decisions," he said.

However, Northern Ireland First Minister Peter Robinson said his Finance Minster Sammy Wilson would meet with his counterpart in the Republic, Brian Lenihan in an attempt to stave off any threat to Northern Ireland's house prices.

"There are assets which are being held by NAMA which impact upon Northern Ireland, those disposals need to be handled in a way that don't swamp the property market and impact adversely on property prices in Northern Ireland," he said.

It is estimated that Irish banks hold anything between €60bn and €90bn of so-called toxic assets - money loaned to property developers and others which might never be repaid.

Around €30bn worth are thought to be outside the Republic and as many as €15bn to €20bn worth of bad property-related debts are thought to be in Northern Ireland.

Deputy First Minister Martin McGuinness also said it is important that both finance ministers work together to ensure proper management of the assets.

"This could have very severe implications for our property market in the North," he said, after the meeting at Farmleigh House in Phoenix Park.

Meanwhile, the Republic's government has confirmed it will pay the promised €9m (£7.7m) towards the new A5 Aughnacloy to Londonderry and the A8 Belfast to Larne roads.

Mr McGuinness had signalled that the Stormont Executive was worried the cash would no longer be made available because of the scale of the economic crisis in the Republic.

But Mr Cowen said he was committed to what he said were "flagship projects".

See: First Ministers In Dublin Economic Talks

(BMcC/JM)