Dáil Éireann Debate, Tuesday - 11 February 2014
394. Deputy Thomas P. Broughan asked the Minister for the Environment, Community and Local Government the steps that are being taken and will be taken to assist persons living in a home that is subject to a shared ownership mortgage between them and a local authority who now find themselves affected by negative equity but where the rental portion to be paid continues to increase year on year. [6566/14]
View answer395. Deputy Thomas P. Broughan asked the Minister for the Environment, Community and Local Government if he has received a supplementary briefing from the Housing Agency regarding the issues requiring further detailed analysis to fully assess the impact on local authorities' finances of introducing possible mitigating measures for persons living in shared ownership situations. [6567/14]
View answer396. Deputy Thomas P. Broughan asked the Minister for the Environment, Community and Local Government if he will outline all of the options that can be explored to alleviate the difficulties of those in shared ownership distress that are contained in the recent circular letter issued to local authorities by his Department. [6568/14]
View answerI propose to take Questions Nos. 394 to 396, inclusive, together.
The Government’s 2011 Housing Policy Statement announced the standing down of all affordable housing schemes, including the shared ownership scheme, in the context of a full review of Part V of the Planning and Development Acts 2000-2013. Details regarding the review are available on my Department’s website www.environ.ie.
The period for public submissions has closed and submissions from a variety of interested parties are now under consideration. I expect to be in a position to formulate future policy approaches and actions, taking account of the consultation process, in the near future.
In 2013, I asked the Housing Agency to conduct a stand-alone review of the shared ownership scheme, including identification of the main difficulties and recommendations for mitigating measures. While I have received an initial draft of the review from the Agency a number of issues have been identified that need further detailed financial analysis in order to fully assess the impact on local authority finances of possible mitigating measures. This data collection exercise has been initiated and will inform future actions.
Pending full conclusion of this review, my Department issued a circular letter to local authorities in December 2013 setting out some of the options and interim actions that might be explored to alleviate the difficulties of those in shared ownership distress such as allowing use of the Mortgage Arrears Resolution Process and room rental for Shared Ownership mortgage holders. It is accepted that these proposals are not a complete solution to the issues that arise for such mortgage holders but are intended as an interim measure pending outcome of the review.
The mortgage arrears resolution process, already in place in respect of commercial mortgages, is now being implemented across all local authorities. In cases of acute mortgage distress, homeowners also have the option of seeking to avail of the legal process now also in place to deal with personal insolvency. I fully recognise that shared ownership home owners are, in many cases , impacted by the downturn in the same way as other home owners, for example in consequence of unemployment and possible negative equity. In such cases borrowers should actively engage with their lenders, whether a commercial financial institution or a local authority, to seek to avail of one of the options available to provide sustainable solutions to distressed mortgages.
On foot of the recommendations of the Keane Report on mortgage arrears, the Government launched a Mortgage to Rent scheme on a pilot basis in February 2012. This scheme was extended nationally in June 2012, targeting those low income families whose mortgage situation is unsustainable and where there is little or no prospect of a significant change in circumstances in the foreseeable future. The Scheme ensures that the family remains in their home, while ownership is transferred to an approved housing body and the family becomes a tenant of the approved housing body. Eligibility requirements are in line with other forms of social housing support.
The scheme for local authority borrowers in arrears, which was piloted in two local authority areas, Westmeath County Council and Dublin City Council, was rolled out nationally very recently. With the support of the Minister for Public Expenditure and Reform and the Housing Finance Agency, I will be allocating an additional €20m to the Mortgage Arrears Resolution Process (MARP) fund in 2014 to significantly expand the capacity of that resource to assist households in mortgage distress.
