Mortgage to Rent Scheme reforms have failed to deliver – Smith

– Just 3 cases involving Approved Housing Bodies completed in Cavan & Monaghan –

Twelve months on from a relaunch of the Mortgage to Rent scheme, Fianna Fáil TD for Cavan – Monaghan Brendan Smith has said the scheme is not fit for purpose and is in need of a major overhaul.

His comments follow confirmation that just 3 cases involving Approved Housing Bodies have been fully concluded in Cavan – Monaghan under the scheme.

Deputy Smith stated, “In theory, the Mortgage to Rent scheme exists to provide a safety net for families who are set to lose their home because of mortgage arrears. Under the scheme, the family will lose the ownership of the home but will continue to live in it. Instead of paying a mortgage, the family will pay a rent to an approved housing body, such as a voluntary housing association.

“Figures provided to Fianna Fáil show that just 162 Mortgage to Rent transactions involving Approved Housing Bodies have been approved nationwide since its inception in July 2012. Only 3 cases have been completed here in Cavan – Monaghan. This is a truly abysmal performance by the scheme.

“With thousands of repossession proceedings in the system, it is deeply concerning this this scheme is failing miserably to provide a safety net for those in arrears who are facing the prospect of losing their home. The Government needs to urgently review the scheme, remove the unnecessary bureaucracy and complexity inherent in it, and make it workable.

“We have been promised all sorts of things from this new government to help those struggling with the mortgage repayments. A good start would be to overhaul the Mortgage to Rent scheme and make it fit for purpose. The banks also need to step up to the plate and actively support the scheme. In this context the question of what happens to the residual debt once the property is sold to a housing association appears to be a major stumbling block”.

To ask the Minister for the Environment, Community and Local Government to provide details for each local authority and approved housing body, of the number of completed mortgage-to-rent transactions to date; and if he will make a statement on the matter.

– Michael McGrath.

For WRITTEN answer on Tuesday, 31st May, 2016.

Ref No: 13148/16

REPLY

Minister for the Environment, Community and Local Government (Deputy Simon Coveney)

There are currently two Mortgage to Rent (MTR) schemes funded by my Department. A scheme exists whereby a local authority (LA) can acquire ownership of properties with unsustainable local authority mortgages, thus enabling the household to remain in their home as a social housing tenant (LA- Mortgage-to- Rent). The other scheme provides for an Approved Housing Body (AHB) to acquire ownership of a property with an unsustainable private mortgage, which also enables the household to remain in their home as a social housing tenant (AHB- Mortgage-to- Rent). Both schemes assist families with income difficulties whose mortgages are unsustainable, and where there is little or no prospect of a significant change in circumstances in the foreseeable future. Both schemes are part of the overall suite of social housing options and an important part of the mortgage arrears resolution process.

Information in relation to LA-Mortgage-to- Rent scheme transactions during its pilot phase in Dublin City Council and Westmeath County Council in 2013 and annual transactions, broken down by local authority, following national roll out of the scheme in 2014 is available on my Department’s website –

http://www.environ.ie/housing/statistics/house-prices-loans-and-profile-borrowers/local-authority-loan-activity

To date in 2016, my Department has funded a further 3 transactions in the Dublin City Council area. The deadline for the next tranche of funding claims from local authorities is 31 July 2016 and my Department expects to receive further claims.

In relation to activity under the AHB Mortgage to Rent scheme, at the end of April 2016 a total of 162 cases have been completed, 18 are currently with the lenders who are seeking the consent of borrowers to share information and for the carrying out of an independent valuation, and 645 are actively being progressed. The tables below give the breakdown by Local Authority and by AHB.

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