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Ireland's Property Boom Hangover!

The hangover of Ireland's property boom: Abandoned ghost estates and lifeless houses stripped of their worth...

Anyone against debt forgiveness should read this dispatch from a ghost estate... and thank God it's them instead of you...

Rhoda Brogan stands at the front door of her three-bed semi, quietly surveying the abandoned, lifeless houses that surround her.

In the centre of the estate there is a green area, wildly overgrown with weeds and nettles and circled by a cracked road and street lights that don't work. It is eerily calm; there are no cars driving around, no children playing - the only sound is the wind.

All of a sudden, Rhoda’s eyes narrow and focus on an abandoned home directly across the road and she considers something for a moment before noticing the open windows.

‘Oh my God! Someone has got into that house since I left this morning,’ she says, quickly crossing the street with her four-year-old daughter, Saoirse, in tow.

Around the back of the empty home, she finds a sliding door forced open and inside, the radiators torn from the walls. ‘I reckon they’ll be back,’ she says calmly of the looters – a fate that she and a handful of neighbours are resigned to.

Stripping unsold houses of anything valuable – flooring, carpet, bathroom suites – is a common occurrence in the estate and, these days, nobody seems surprised, let alone troubled.

‘I’m just glad there are no sleeping bags in there,’ she says, mumbling something about a fear of squatters before casually walking back across the street.

The Glenall development in Borris-in-Ossory, Co. Laois, is just one of ­Ireland’s 1,655 ghost estates. If they were entirely empty, they would be simple monuments to a building boom that went too far.

But many, including Glenall, are unkempt and dangerous – and home to a trickle of unlucky buyers caught smack in the middle of the property crash.

Planning permission at Glenall for a total of 91 houses was initially granted in 2005 to the Athlone-based development company Vernotico. Construction began later that year. The original plans included five different types of idyllic family home, from three-bed semis priced at €195,000 to four-bed detached homes selling for up to €335,000.

The picture-perfect life presented in advertising notices offered a residential utopia within 25km of Portlaoise yet nestled snugly in rural Ireland, against a backdrop of the Slieve Bloom Mountains.

One newspaper article announced, in 2008: ‘The development includes ornate street lighting, landscaped and planted areas... A large on-site crèche is being provided to facilitate the modern working family.’ None of this would ever be built.

It doesn’t take long to drive through Borris-in-Ossory, with its staple quota of pubs, a hotel, a chipper and four modern housing developments. In Glenall, just six of the 26 houses are occupied, by a total of 15 people. Each resident has a story of broken dreams and each a view of their own nightmare.

‘We are stuck here. There is nothing we can do. We can’t move, we can’t sell, we are stuck,’ says Rhoda, sitting in her kitchen, which overlooks a manicured garden, out of place in a row of overgrown wastelands. They sold us a dream and now it’s gone.’

The Brogans – Rhoda, 36, her husband John, 50, and their four-year-old daughter – paid €215,000 for their home three-and-a-half years ago.

Rhoda is a native of Borris-in-Ossory, while John comes from Tyrone. They used to live in a thatched cottage on the fringe of the village but when they could see the inevitable end of the property bubble, they decided to sell up to fund a mortgage-free life in Glenall.

‘The houses were built at the time and there were two showhouses,’ Rhoda recalls. ‘There was the cheaper one and the more expensive one. We had a small child so we went for the cheaper one.

‘We were really excited – it was a brand new shiny house. It’s like a new car – you can’t wait to get into it and show it off. While we were waiting, we were living with my parents. The house we had picked wasn’t ready yet and I was there every night looking at it. I couldn’t wait to move in. Now I’m sorry we did.’

The family moved in in March 2008 and shortly afterwards began to fear the worst when there was no sign of more work being done or new neighbours arriving. About three months later, Rhoda hit rock bottom.

‘There was no one moving in and it was a wilderness,’ she says.

‘If I sold this in the morning, I would have to give the bank €63,000 because the developer didn’t pay them for the land.’

It costs a lot to heat their property because most of it is lost through the walls to the vacant shell of a house next door.

But they do what they can. Recently, John bought a second-hand ride-on mower for €600 so he could cut the grass in the estate but now it’s back to a familiar, daunting height.

The houses at Glenall – with their dazzling white walls, wooden floors and well-finished rooms – are attractive and seem well-built. The ones that were completed are lined up in three rows, surrounded on all sides by derelict sites where the rest of the scheme was due to be located.

The various house types were to be labelled with birds’ names such as ‘The Sparrow’ or ‘The Robin’ and were sold as they were built. According to residents, nobody bought off the plans.

Old signs with arrows leading prospective buyers to showhouses flap in the wind; driveways appear both aged and unused at the same time.

In almost every corner there are concrete chunks, metal pipes, building blocks and rubble; back gardens that resemble something from a post-apocalyptic film can be viewed directly through empty hallways from the front windows.

Then, in one corner, a showhouse that for some reason managed to avoid the looters (probably due to its close proximity to two occupied homes) gives a glimpse of how things were supposed to be: a smartly decorated interior with couches and fireplaces, a kitchen table and chairs – everything but life.

The occupied properties are scattered around the development but the front row – which is visible from the main road and features what were supposed to be the ‘prize houses’ – lies idle.

Allowing children out to play here is not easy. There is raw sewage that was only recently fenced off. Bricks and rubble clutter the road and strangers often drive in to steal.
‘It used to bother me more but you can’t let it get to you. You could but what’s the point?’ asks Rhoda.

‘We tried to get answers from the developers first. I contacted them but we got no emails or phone calls back. We tried the Health and Safety Authority because of the state of the place and they said that because the builder wasn’t gone three years, they couldn’t do anything.

‘Then I went to the council and they basically said the same thing. You might as well be beating your head off the wall trying to get to the developers – the cat would have more answers. I tried many times.

‘The developers used to answer back in the beginning when they were still selling the houses but we didn’t realise at that time that we were in such hot water.’

Rhoda says that every weekend, cars constantly drive in just to look around at the ghost estate. ‘Maybe they are locals who have heard about it and want to see what’s being done,’ she suggests.

Local councillor John King, who has been vocal on the subject, has asked how permission for such a development in such a small town was given.

‘They should have developed industry here first and then housing,’ he said, walking around the weed-laden footpaths.

Laois County Council, praised for its efforts to help this small community, filed an enforcement order against the developer, Vernotico, and its directors last November –claiming they were in breach of planning permission because the place had been left in such a state.

With the help of €32,900 in Government funding, the council carried out some essential safety works, including raising a fence to block access to the collecting sewage pools. It also covered up dangerous pipe holes in the ground, 10ft deep concrete pits where children would commonly play and which locals had tried their best to seal off.

But the street lights don’t work, the roads are destroyed and the empty houses, many of them unlocked, are routinely raided by strangers who arrive in vans.

In the past few weeks, according to 28-year-old resident Adrian Moore, an Irish Rail employee who shares his house with a friend, somebody stripped one row of houses of oil tanks and burners. He says: ‘There are people driving round in the middle of the night just taking stuff. In that house over there, all the baths and sinks have been taken. You see them but what can you do? It’s a free-for-all.’

Adrian bought his house when the estate was charming and full of promise but now he is paying a heavy mortgage on a property that will never recoup its value.

‘At the time, it was newly built and it looked really nice. Then when I bought, little else seemed to happen,’ he says, echoing a common story here.

In the good old days, many of the homes proudly displayed ‘sold’ stickers in the windows, an indication that all was well in Glenall. But when a trickle of residents arrived with their possessions in 2007, they quickly began to notice things going sour.

The following summer, work on the site stopped as usual for the builders’ holidays, leaving about four unfinished homes and 10 sets of foundations behind them. And they never came back.

‘I was one of the first in, in about 2007. It was a busy building site with “sold” written on nearly every window in the estate, which turned out not to be true,’ says 58-year-old Carmel Hollywood, a retired dressmaker who lives alone.

Originally from Ballyfermot in Dublin, she moved to Borris-in-Ossory from Athy, Co. Kildare, for a mortgage-free life.

‘You were promised so much and I bought into it,’ she says. ‘Gradually, one or two more people moved in. Then everything just stopped in their tracks. It’s almost a feeling of being abandoned: that you live in a ghost town.’

Pointing towards the field with the raw sewage, she explains: ‘We have seen kids in there playing. I wouldn’t let my dogs over there because they came back once and they were stinking – I had to scrub them. You could actually go over and see it running.’

Dismissing the government’s recent announcement that those in ghost estates would be exempt from the €100 property tax, she says: ‘It’s an insult really. Do they really think that €2 a week is going to pay us for this?’

The few homeowners that live in Glenall have sought reassurances from the developer but their pleas have fallen on deaf ears.

Vernotico Developments Ltd was registered in 1999 and is based in Athlone, Co. Westmeath. The company – which lists its directors as Mary and Patrick Collins, both from Swords, Co. Dublin – is still active and continues to file accounts, though its exact involvement in other projects, if any, is not clear. Neither Patrick nor Mary Collins could be reached for comment.

Angela Farrell, of Dublin-based Farrell Solicitors, was involved in selling the houses. Miss Farrell did not respond when asked to comment by the Irish Mail on Sunday.

Two of Glenall’s occupied houses are now on the market, although there is little chance of them being sold. They are the only two houses that appear to be available to buy. Nobody is sure whether the unoccupied houses are still for sale but appears that anybody who wants to buy one will have a hard time contacting the developer.

A woman answering a mobile-phone number listed on the sales sheets for the original broker, AC Bertles, said she did not wish to be contacted again, that she had worked briefly for Miss Farrell but that it was a long time ago. An online phone listing for the company reached a residential house in Swords, Co. Dublin.

Another listed number rang straight through to Farrell Solicitors. When asked about the Glenall estate, a woman said: ‘I don’t know [about AC Bertles] to be honest; it could be going back a few years.’

Mystery continues to surround what happened at Glenall and what may happen next. It is believed that Vernotico – a classic speculative developer – simply borrowed too much, built too much, ran out of money and could not meet its debts.

Then came the crash. Sinn Féin TD Brian Stanley, who has been fighting on behalf of the residents, explains: ‘The legal owner is the development company. In my opinion it is in financial difficulty and is in default of the planning permission [due to incomplete works].

‘The situation is that it was playing the game of borrowing, building and selling and trying to keep ahead of the posse. The probability is that three or four years ago, things started slowing down and it couldn’t sell [the houses].’

Mr Stanley has raised the issue in the Dáil. Meanwhile, Laois County Council hopes that it can facilitate a resolution. A spokesman says: ‘The next step is the resolution of the long-term problem. Everyone involved – the home owners, the developers, the authorities and the financiers – need to engage and come up with a plan to resolve the problems on site.

‘There is action at Department of the Environment level on this and another project team has been set up to use the good resolutions in other cases as a template. If it is found that a certain approach has worked, they will look at that.’

It is clearly uncharted water – Ireland has never had to deal with such a problem before on such a large scale.

According to a report issued by the Department of the Environment last June, entitled Resolving Ireland’s Unfinished Housing Developments, many of the 1,655 incomplete developments have ‘serious completion issues where residents are significantly affected’. To be resolved, these developments ‘may require some level of intervention by the State’ it says.

Government funding seems unlikely however, given that the State has already taken on so much of the developers’ debt. As was revealed last month when Nama’s 2010 report was published, the country’s top 12 indebted developers owe more than €22.3bn. The top three borrowers alone owe €8.4bn.

In the same report, Nama announced plans to encourage buyers to invest in 12,000 houses and apartments on its books – it will offer buyers a deferral on 20% of the value should it drop over the next five years.

Meanwhile, the Government believes that co-operation between stakeholders is imperative to solve the issues in unfinished estates.

‘Local authorities should explore all reasonable avenues to compel those responsible to address the problems,’ the department report continues.

‘Where those avenues have been exhausted, the local authority may step in to develop and implement an initial site response for developments that have effectively become abandoned.

'The use of financial securities/bonds provided under planning permission may give some financial assistance to local authorities.’

In that regard, Laois County Council has begun the process of calling in a €350,000 insurance bond on the development, which could pay for substantial improvements – although there are many who believe this could be a drawn-out process.

Sources close to the dispute have suggested that the insurers may fight the claim, given the confusion over the estate’s status. How much the council can access, and when, no one can say. The process has only recently got under way.

The local authority has also initiated contact with the developers but it is not believed that discussions have proved constructive to date.

A national co-ordination committee will now oversee progress on all the ghost estates and other incomplete housing developments in Ireland.

In the meantime, residents can only wait. It is likely to be some time before the view outside their windows changes or a reasonable quality of life returns.

At Glenall, bare flagpoles still stand outside a row of unsold showhouses but they no longer fly banners advertising a brighter future.

‘Some days, you’re okay but other days you look out and it’s bleak,’ says Carmel Hollywood, gazing out from her sitting room window.

‘It’s bleaker in the winter. You ask yourself, “What have I got myself into?” I am 58 and I came here to retire but now it may never be finished.’

Report by Mark Hilliard - The Daily Mail

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