A 19th Century NAMA- The Encumbered Estates Act

Snickers Man

NAMA is "the only game in town" we are told, to get us out of the financial mess caused by banks gambling on an indefinitely appreciating property market only to see it beaten hands down by the fundamental laws of gravity.

However, we have been here before.

In the days before urban commercial property development was the path to riches for those high in ambition but low in talent, sizable country estates were the things to have. Especially if you were an Ascendancy landlord with massive Irish estates rented out to tenant farmers on terms that benefited you at the expense of the farmer.

However, in the wake of the Famine with a debilitated tenant class remaining apart from those who had starved or fled, remuneration for landlords from their Irish estates plummeted. Many landlords were in dire financial straits (mutatis mutandis with respect to their tenants) and found themselves holding highly indebted properties from which they were gaining miniscule rental returns.

Enter the Encumbered Estates Act of 1849 which facilitated the transfer of bankrupt estates into the hands of new owners, many of them property speculators who bought the estates at rock bottom prices.

I am not sure of the extent to which the government intervened in taking over these properties before selling them on, but the fact that an Act was required to facilitate this suggests some such intervention.

This article makes the interesting point that the Encumbered Estates Act saw a transfer of land from absentee English-based landlords to an emerging Irish, largely Dublin-based, property owning class. Many of whom were recently emancipated CAtholics. This in turn fuelled nationalism which was not one of the intended consequences of the Act which was supposed to encourage a new flow of capital from British investors whcih would pay for much needed investment and modernisation of Irish agriculture.

The article also makes clear that the new landlords were little better than the old. If anything they were worse, which gave the nationalist cause a strong social root in the whole question of land ownership and tenant rights.

Again, this is not what was supposed to happen. The bitterness of the tenants was supposed to be assuaged by the modernisation of their infrastructure and the reform of the tenant system that would be needed to derive the maximum benefit from new innovations.

What parallels are there with NAMA?
We have owners of decrepit property investments desperate to get them off their hands. The government will buy the debt at a discount and take over effective ownership of the collateral, ie the land and property. But it will want to flog it off as soon as it can to make a "profit for the tax payer."

The government assure us that a 10 percent rise in property prices over the next 10 years will be enough to make the whole deal a success and a good deal for the tax payer.

But what if that doesn't happen? There will be a fire sale, sooner or later, and the tax payer may have to take a loss. The interesting question will be who will actually end up owning the properties?

It could be that this time round, the fire sale of decrepit properties will see a transfer of land away from local owners towards multinational speculators. Now wouldn't that be an irony?

The greatest disaster in Irish history actually helped the Irish gain control over their own land,
whereas the biggest and most rapid boom in our history could see much of our land auctioned off to the highest international bidder!

Ostrom

Interesting topic, will write something when I'm not relying on my phone!

McArmalite

Snickers Man wrote: »

NAMA is "the only game in town" we are told, to get us out of the financial mess caused by banks gambling on an indefinitely appreciating property market only to see it beaten hands down by the fundamental laws of gravity.

However, we have been here before.

In the days before urban commercial property development was the path to riches for those high in ambition but low in talent, sizable country estates were the things to have. Especially if you were an Ascendancy landlord with massive Irish estates rented out to tenant farmers on terms that benefited you at the expense of the farmer.

However, in the wake of the Famine with a debilitated tenant class remaining apart from those who had starved or fled, remuneration for landlords from their Irish estates plummeted. Many landlords were in dire financial straits (mutatis mutandis with respect to their tenants) and found themselves holding highly indebted properties from which they were gaining miniscule rental returns.

Enter the Encumbered Estates Act of 1849 which facilitated the transfer of bankrupt estates into the hands of new owners, many of them property speculators who bought the estates at rock bottom prices.

I am not sure of the extent to which the government intervened in taking over these properties before selling them on, but the fact that an Act was required to facilitate this suggests some such intervention.

This article makes the interesting point that the Encumbered Estates Act saw a transfer of land from absentee English-based landlords to an emerging Irish, largely Dublin-based, property owning class. Many of whom were recently emancipated CAtholics. This in turn fuelled nationalism which was not one of the intended consequences of the Act which was supposed to encourage a new flow of capital from British investors whcih would pay for much needed investment and modernisation of Irish agriculture.

The article also makes clear that the new landlords were little better than the old. If anything they were worse, which gave the nationalist cause a strong social root in the whole question of land ownership and tenant rights.

Again, this is not what was supposed to happen. The bitterness of the tenants was supposed to be assuaged by the modernisation of their infrastructure and the reform of the tenant system that would be needed to derive the maximum benefit from new innovations.

What parallels are there with NAMA?
We have owners of decrepit property investments desperate to get them off their hands. The government will buy the debt at a discount and take over effective ownership of the collateral, ie the land and property. But it will want to flog it off as soon as it can to make a "profit for the tax payer."

The government assure us that a 10 percent rise in property prices over the next 10 years will be enough to make the whole deal a success and a good deal for the tax payer.

But what if that doesn't happen? There will be a fire sale, sooner or later, and the tax payer may have to take a loss. The interesting question will be who will actually end up owning the properties?

It could be that this time round, the fire sale of decrepit properties will see a transfer of land away from local owners towards multinational speculators. Now wouldn't that be an irony?

The greatest disaster in Irish history actually helped the Irish gain control over their own land,
whereas the biggest and most rapid boom in our history could see much of our land auctioned off to the highest international bidder!

Another good thread.

" The government will buy the debt at a discount and take over effective ownership of the collateral, ie the land and property. But it will want to flog it off as soon as it can to make a "profit for the tax payer."

You can be sure that they'll make sure they sell it to their Fianna Fail cronies for a killing and then when it later becomes public we'll have a yet another tribunal and teh tribunal will make a report, they'll discuss it in the Dail for an afternoon and then the report will be thrown on a shelf to gather dust, no prosecutions or nothing, just lilke all the other bloody tribunals. This countruy is joke and the electroate who keep putting them back in are a even bigger joke. Will get back to this thread later.

MarchDub

The Encumbered Estates Act of 1849 did little to nothing to improve the lot of the ordinary tenant farmer and family. In fact, life got worse. Evictions continued and poverty levels did not improve and the only thing saving Ireland from total economic collapse was emigration. It was emigration that allowed some smaller farms to survive by expanding onto the vacated holdings.

The Irish Tenant Right League was formed in 1850 to try and counter balance what was seen as British Government indifference to Irish tenants - the vast bulk of the Irish population at the time. The Land war followed when Michael Davitt and Parnelll - through his Parliamentary presence - organised the small tenant holders into the Land League. It was only then that true land reforms occurred - because a new threat to the landed and governing class emerged: Home Rule.

McArmalite

Snickers Man wrote: »

NAMA is "the only game in town" we are told, to get us out of the financial mess caused by banks gambling on an indefinitely appreciating property market only to see it beaten hands down by the fundamental laws of gravity.

However, we have been here before.

In the days before urban commercial property development was the path to riches for those high in ambition but low in talent, sizable country estates were the things to have. Especially if you were an Ascendancy landlord with massive Irish estates rented out to tenant farmers on terms that benefited you at the expense of the farmer.

However, in the wake of the Famine with a debilitated tenant class remaining apart from those who had starved or fled, remuneration for landlords from their Irish estates plummeted. Many landlords were in dire financial straits (mutatis mutandis with respect to their tenants) and found themselves holding highly indebted properties from which they were gaining miniscule rental returns.

Enter the Encumbered Estates Act of 1849 which facilitated the transfer of bankrupt estates into the hands of new owners, many of them property speculators who bought the estates at rock bottom prices.

I am not sure of the extent to which the government intervened in taking over these properties before selling them on, but the fact that an Act was required to facilitate this suggests some such intervention.

This article makes the interesting point that the Encumbered Estates Act saw a transfer of land from absentee English-based landlords to an emerging Irish, largely Dublin-based, property owning class. Many of whom were recently emancipated CAtholics. This in turn fuelled nationalism which was not one of the intended consequences of the Act which was supposed to encourage a new flow of capital from British investors whcih would pay for much needed investment and modernisation of Irish agriculture.

The article also makes clear that the new landlords were little better than the old. If anything they were worse, which gave the nationalist cause a strong social root in the whole question of land ownership and tenant rights.

Again, this is not what was supposed to happen. The bitterness of the tenants was supposed to be assuaged by the modernisation of their infrastructure and the reform of the tenant system that would be needed to derive the maximum benefit from new innovations.

What parallels are there with NAMA?
We have owners of decrepit property investments desperate to get them off their hands. The government will buy the debt at a discount and take over effective ownership of the collateral, ie the land and property. But it will want to flog it off as soon as it can to make a "profit for the tax payer."

The government assure us that a 10 percent rise in property prices over the next 10 years will be enough to make the whole deal a success and a good deal for the tax payer.

But what if that doesn't happen? There will be a fire sale, sooner or later, and the tax payer may have to take a loss. The interesting question will be who will actually end up owning the properties?

It could be that this time round, the fire sale of decrepit properties will see a transfer of land away from local owners towards multinational speculators. Now wouldn't that be an irony?

The greatest disaster in Irish history actually helped the Irish gain control over their own land,
whereas the biggest and most rapid boom in our history could see much of our land auctioned off to the highest international bidder!

" a transfer of land from absentee English-based landlords to an emerging Irish, largely Dublin-based, property owning class. Many of whom were recently emancipated CAtholics......The article also makes clear that the new landlords were little better than the old. If anything they were worse, which gave the nationalist cause a strong social root in the whole question of land ownership and tenant rights. I would say indeed this new Catholic property owning class were probably worse than those before them. To the ordinary tennant I suppose it made no difference, but I'd say they were more Catholic unionists than Catholic nationalists.

Ostrom

MarchDub wrote: »

The Encumbered Estates Act of 1849 did little to nothing to improve the lot of the ordinary tenant farmer and family. In fact, life got worse. Evictions continued and poverty levels did not improve and the only thing saving Ireland from total economic collapse was emigration. It was emigration that allowed some smaller farms to survive by expanding onto the vacated holdings.

And later, 'forced' emigration and rationalisation of holdings via. the congested districts board, particularly across the western seaboard. I agree that it failed to meet its expected results, and you dont see much in the way of improvement until the tenant right movement, and CDB resettlement. The incentive for individual landlords to rationalise rundale for example, produced more favourable living conditions for the tenantry than acts of state. (Hill - Gweedore)

Snickers Man

MAJOR BUMP

Just reminded myself of this thread from nearly seven years ago. Might be worthy of a review.

This entailed some speculation about what would happen to Irish property and the tax payer after NAMA had run its course. A few points still seem relevant. They are highlighted in Bold below.

Anybody got any penetrating insight, based on more knowledge than a (very) amateur economist such as I might have?

Snickers Man wrote: »

NAMA is "the only game in town" we are told, to get us out of the financial mess caused by banks gambling on an indefinitely appreciating property market only to see it beaten hands down by the fundamental laws of gravity.

However, we have been here before.

In the days before urban commercial property development was the path to riches for those high in ambition but low in talent, sizable country estates were the things to have. Especially if you were an Ascendancy landlord with massive Irish estates rented out to tenant farmers on terms that benefited you at the expense of the farmer.

However, in the wake of the Famine with a debilitated tenant class remaining apart from those who had starved or fled, remuneration for landlords from their Irish estates plummeted. Many landlords were in dire financial straits (mutatis mutandis with respect to their tenants) and found themselves holding highly indebted properties from which they were gaining miniscule rental returns.

Enter the Encumbered Estates Act of 1849 which facilitated the transfer of bankrupt estates into the hands of new owners, many of them property speculators who bought the estates at rock bottom prices.

I am not sure of the extent to which the government intervened in taking over these properties before selling them on, but the fact that an Act was required to facilitate this suggests some such intervention.

This article makes the interesting point that the Encumbered Estates Act saw a transfer of land from absentee English-based landlords to an emerging Irish, largely Dublin-based, property owning class. Many of whom were recently emancipated CAtholics. This in turn fuelled nationalism which was not one of the intended consequences of the Act which was supposed to encourage a new flow of capital from British investors whcih would pay for much needed investment and modernisation of Irish agriculture.

The article also makes clear that the new landlords were little better than the old. If anything they were worse, which gave the nationalist cause a strong social root in the whole question of land ownership and tenant rights.

Again, this is not what was supposed to happen. The bitterness of the tenants was supposed to be assuaged by the modernisation of their infrastructure and the reform of the tenant system that would be needed to derive the maximum benefit from new innovations.

What parallels are there with NAMA?
We have owners of decrepit property investments desperate to get them off their hands. The government will buy the debt at a discount and take over effective ownership of the collateral, ie the land and property. But it will want to flog it off as soon as it can to make a "profit for the tax payer."

The government assure us that a 10 percent rise in property prices over the next 10 years will be enough to make the whole deal a success and a good deal for the tax payer.

But what if that doesn't happen? There will be a fire sale, sooner or later, and the tax payer may have to take a loss. The interesting question will be who will actually end up owning the properties?

It could be that this time round, the fire sale of decrepit properties will see a transfer of land away from local owners towards multinational speculators. Now wouldn't that be an irony?

The greatest disaster in Irish history actually helped the Irish gain control over their own land,
whereas the biggest and most rapid boom in our history could see much of our land auctioned off to the highest international bidder!

pedroeibar1

http://www.boards.ie/vbulletin/showpost.php?p=93212337&postcount=5

http://www.boards.ie/vbulletin/showpost.php?p=93224207&postcount=8

Jesus.

Snickers Man wrote: »

This article makes the interesting point that the Encumbered Estates Act saw a transfer of land from absentee English-based landlords to an emerging Irish, largely Dublin-based, property owning class. Many of whom were recently emancipated CAtholics. This in turn fuelled nationalism!

How so?