Dáil Éireann Debate, Tuesday - 8 December 2020
279. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage if his attention has been drawn to the fact that private mortgage to rent providers are outbidding not for profit mortgage to rent providers on mortgage to rent deals and in doing so introducing a level of risk to the stability of the mortgage to rent tenancy; and his plans in this regard. [41523/20]
View answer293. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage the number of applications for mortgage-to-rent since the scheme was introduced; the number of applicants who have been improved; and the number of mortgage-to-rent sales closed by year since the scheme was introduced. [42040/20]
View answerI propose to take Questions Nos. 279 and 293 together.
The Mortgage to Rent (MTR) scheme introduced in 2012 is targeted at supporting households in mortgage arrears who: have had their mortgage position deemed unsustainable by their lender under the Mortgage Arrears Resolution Process (MARP); agree to the voluntary surrender of their home and are deemed eligible for social housing support. The property in question must also meet certain eligibility criteria.
Up to the end of November 2020, 884 households with unsustainable private mortgages have completed the MTR scheme since its introduction nationally in 2013. The 884 households in the scheme represent 1,493 adults and 1,399 children who have remained living in their homes and communities. There are currently 1,296 active cases being progressed under the scheme.
The table below details the number of MTR transactions completed in the years 2012 to 2019 and up to the end of November 2020:
|
Year |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 (end November) |
Total |
|
No. of MTR transactions competed |
1 |
21 |
29 |
96 |
70 |
91 |
137 |
196 |
243 |
884 |
Information in relation to the number of MTR applications submitted annually from 2012 to 2019 and to end November 2020 is outlined in the table below. In the earlier stages of the operation of the scheme, when lenders were not familiar with its operation, 500 cases were incorrectly submitted by lenders. In addition, 233 cases were submitted in duplicate. By its nature, the scheme also lends itself to a large withdrawal rate and to the end of November 2020, 1,327 applications had been withdrawn.
|
Year |
No. of MTR applications |
|
2012 |
681 |
|
2013 |
1,080 |
|
2014 |
527 |
|
2015 |
893 |
|
2016 |
394 |
|
2017 |
282 |
|
2018 |
618 |
|
2019 |
667 |
|
2020 to end November |
461 |
The Housing Agency, who administer the MTR scheme on my Department's behalf, publishes, on a quarterly basis, detailed statistical information on the operation of the MTR scheme. This information is available on the Agency's website at the following link:
https://www.housingagency.ie/our-services/housing-supply-services/mortgage-to-rent.aspx .
A Review of the MTR scheme for borrowers of commercial private lending institutions published in February 2017 explored the avenues and impediments to participation in the scheme and identified a number of actions to make the scheme work better for borrowers. My Department and the Housing Agency have worked with all stakeholders to ensure that the actions set out in the review are being effectively implemented to benefit a greater number of households. As a result of the improvements implemented, an upward trend in case completions has been evident since 2018.
The MTR Review taking account of capacity within the Approved Housing Body (AHB) sector, also recommended that alternative funding options, including the off-balance sheet potential of private institutional investment, be explored in order to allow the MTR scheme to deliver at scale. An Expressions of Interest (EOI) Request issued in 2017 inviting parties from the private sectors to express their interest in participating in a new alternatively funded long-term MTR lease model.
Under this alternatively funded model, a participant from the private sector purchases a property or properties from lenders subsequent to their voluntary surrender by borrowers that meet the MTR eligibility criteria and then enters into a long-term lease arrangement with the local authority in whose area the property is situated for a defined term at an agreed rent, thereby enabling the borrower to remain living in their own home. The outcome from the EOI process is that a new MTR alternatively funded lease model was announced in 2018 with Home for Life Ltd. as the participant from the private sector.
AHBs are an integral part of the MTR scheme and their participation in the scheme has enabled and continues to enable a significant number of borrowers to remain in their homes as social housing tenants.
The primary difference between an AHB acquiring a property under the MTR scheme and a private company acquiring a property is that in the private company's case private funding is used to purchase the MTR property as opposed to Exchequer funding. The same MTR eligibility criteria apply and the social housing tenant status of those entering the scheme are the same.
The MTR process involves the Housing Agency commissioning an independent property valuation and it is on the basis of this valuation that MTR providers, both AHBs and Home for Life Ltd., are invited to express an interest in a particular property. Should more than one provider express an interest in a particular property, the Housing Agency then randomly selects the provider and assigns the case to that provider.
In addition, any MTR provider may work directly with lenders to develop joint-agreements to purchase properties at discounts on market values. Such an approach can achieve a greater number of successful MTR cases as well as the benefit of discounted purchase prices.
Given the nature of the individual property transaction underpinning MTR, the decision to purchase a property under the MTR scheme is a matter for the MTR provider. In all scenarios, my Department and the Housing Agency are focussed on meeting the long-term housing needs of the greatest number of households in unsustainable mortgage arrears.
The Programme for Government includes a commitment to strengthen the Mortgage to Rent Scheme and ensure that it is helping those who need it. Building on the significant improvements already made to the scheme since 2017, my Department is currently working closely with the Housing Agency to identify any further improvements required to the scheme.
