I propose to take Question Nos. 378 and 379 together.
In 2013, I asked the Housing Agency to conduct a standalone 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. For example, full information on the status of each local authority’s loan book is required in order to accurately determine the implications of any possible solutions to shared ownership issues for local authority debt management generally. This substantial data collection project involving my Department, the Local Government Management Agency and the local authorities themselves is under way. It will be a number of months before sufficient data has been collected in order to complete the requisite analysis to enable the completion of the review.
Pending full conclusion of this review, my Department issued a circular letter to local authorities 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.
I fully recognise that shared ownership home owners, amongst others, have been affected by issues such as unemployment, possible negative equity, and changes in rental contributions. 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.
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.
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. To date, some 40 households have availed of the Mortgage to Rent scheme facilitating low income families whose mortgage situation is unsustainable. In addition, my Department has issued full funding approval under the scheme for a further 51 housing units. 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, has now been rolled out nationally.