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Mortgage to Rent Scheme Application Numbers

Dáil Éireann Debate, Tuesday - 15 April 2014

Tuesday, 15 April 2014

Questions (393, 413, 414, 415, 416, 417, 418, 431)

Michael McGrath

Question:

393. Deputy Michael McGrath asked the Minister for the Environment, Community and Local Government if he will specify, for each financial institution, the number of mortgage to rent transactions that have been completed to date; the local authorities and-or voluntary housing bodies concerned; the number that are currently being worked on; and if he will make a statement on the matter. [17273/14]

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Stephen Donnelly

Question:

413. Deputy Stephen S. Donnelly asked the Minister for the Environment, Community and Local Government with regard to the mortgage to rent scheme, the funding that has been allocated per local authority for 2014; and if he will make a statement on the matter. [17602/14]

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Stephen Donnelly

Question:

414. Deputy Stephen S. Donnelly asked the Minister for the Environment, Community and Local Government with regard to the mortgage to rent scheme, the number of completed deals that have been completed to date in 2014 by local authority; and if he will make a statement on the matter. [17603/14]

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Stephen Donnelly

Question:

415. Deputy Stephen S. Donnelly asked the Minister for the Environment, Community and Local Government with regard to the mortgage to rent scheme, the property value cap-maximum allowed per geographic area; and if he will make a statement on the matter. [17604/14]

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Stephen Donnelly

Question:

416. Deputy Stephen S. Donnelly asked the Minister for the Environment, Community and Local Government with regard to the mortgage to rent scheme, if he will provide the analysis leading to the property value cap-maximum allowed per geographic area; and if he will make a statement on the matter. [17605/14]

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Stephen Donnelly

Question:

417. Deputy Stephen S. Donnelly asked the Minister for the Environment, Community and Local Government with regard to the mortgage to rent scheme, the current set of eligibility criteria and any changes made to these criteria in the past 12 months; and if he will make a statement on the matter. [17606/14]

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Stephen Donnelly

Question:

418. Deputy Stephen S. Donnelly asked the Minister for the Environment, Community and Local Government subsequent to this Deputy's proposal on the mortgage to rent scheme (details supplied), if he will incorporate any of the proposals made into the mortgage to rent scheme, and, if so, when, and, if not, the reason; and if he will make a statement on the matter. [17607/14]

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Ann Phelan

Question:

431. Deputy Ann Phelan asked the Minister for the Environment, Community and Local Government if the mortgage to rent scheme is still being rolled out; if this in not the case, the reason it has ceased; and if he will make a statement on the matter. [17826/14]

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Written answers

I propose to take Questions Nos. 393, 413 to 418, inclusive, and 431 together.

There are currently two mortgage-to-rent schemes in operation through 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 are designed to assist families with income difficulties whose mortgages are now unsustainable, and where there is little or no prospect of a significant change in circumstances in the foreseeable future.

On foot of the recommendations of the Keane Report on mortgage arrears the Government launched the AHB Mortgage to Rent scheme (AHB-mortgage-to-rent) on a pilot basis in February 2012 and extended it nationally in June 2012. The scheme is currently in operation and continues to accept applications from lending institutions.

To be eligible for the AHB-mortgage-to-rent scheme a household must have had their mortgage position deemed unsustainable under the Mortgage Arrears Resolution Process, agree to the voluntary surrender of their home, be in negative equity, and be deemed eligible for social housing in accordance with section 20 of the Housing (scellaneous Provisions) Act 2009.

In relation to the application of a maximum property value, in order for a property to be considered under the scheme it must be purchased for less than €220,000 (per property) in the Greater Dublin Area and €180,000 (per property) in the rest of the country. These limits were determined by a working group which took account of available market data and the current social housing acquisition limits. These limits are considered to be reasonable in respect of the income bracket that is targeted by the scheme.

To date, 2,337 cases have been put forward by private lending institutions for application to the AHB-mortgage-to-rent scheme. 38 of these cases have agreements completed and the households in question have become, or are in the process of becoming, social housing tenants. I have provided a breakdown of the number of completed cases both by financial institution (Table 1) and local authority (Table 2) for the AHB-mortgage-to-rent scheme. Cluid Housing Association has completed 33 of these cases, Oaklee Housing Trust have completed 2 cases, with Tuath Housing Association completing the remaining 3 cases. I expect that these numbers will significantly increase during 2014.

Table 1 - AHB-Mortgage-to-Rent completed cases by Financial Institution

Financial Institution

Complete

AIB

1

BOI

1

EBS

2

KBCI

1

Pepper

24

Start Mortgages

9

Grand Total

38

Table 2 - AHB-Mortgage-to-Rent completed cases by Local Authority

Authority

Complete

Carlow

2

Clare

1

Cork City

3

Cork County

2

Dublin C ity Council

5

Drogheda

1

Dún Laoghaire Rathdown

1

Dundalk

1

Fingal

1

Kildare

4

Kilkenny

2

Limerick

3

Meath

3

South Dublin County Council

3

Tipperary

2

Waterford City

1

Waterford County

1

Westmeath

1

Wicklow

1

Overall

38

A further 464 cases have been advanced and are under negotiation, with 988 cases in the initial stages of the process. Of the cases put forward by private lending institutions 847 are not progressing for various reasons including the borrower declining the scheme, the lender withdrawing the offer of the scheme due to a change in circumstances of the borrower, eligibility for social housing, failing to agree a sale price or the condition of the property.

The LA mortgage–to–rent scheme was piloted in two local authority areas in 2013, Westmeath County Council and Dublin City Council, was implemented nationally in February 2014. Dublin City Council and Westmeath County Council completed 10 cases and 8 cases, respectively, under the pilot scheme. Eligibility for the LA-mortgage-to-rent scheme is broadly similar to eligibility under AHB-mortgage-to-rent; however, engagement with the Mortgage Loan and Arrears Support Unit of the local authority is required as an alternative to the Mortgage Arrears Resolution Process for private lending institutions.

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 LA -mortgage-to-rent scheme in 2014 to significantly expand the capacity of that resource to assist local authority borrowers in mortgage distress.

My Department has considered the proposals submitted in relation to AHB-mortgage-to-rent and a reply will issue directly shortly. I would, however, point out that AHBs can currently acquire properties (at auctions or through other means) for use as social housing, if the AHB feels it is a financially feasible option and the properties meet the criteria of the social housing leasing initiative. The leasing initiative already facilitates this and has provided capital funds in the form of the Capital Advance Leasing Facility (CALF) to AHBs to assist them in leveraging their own private finance. The combination of funding under the leasing scheme and existing provisions of the AHB mortgage to rent scheme provide AHBs with sufficient opportunity to acquire properties for social housing purposes.

Further information in relation to Mortgage to Rent Schemes generally is available on the Housing Agency’s website, www.housing.ie.

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