Twelve months on from a relaunch of the Mortgage to Rent scheme, Fianna Fáil Finance spokesperson Michael McGrath has said the scheme is not fit for purpose and is in need of a major overhaul.
His comments follow confirmation that just 162 cases involving Approved Housing Bodies have been fully concluded under the scheme since its inception in July 2012. The data also shows that in some counties no transactions have yet been approved.
While a number of other cases are reported to be in the pipeline, the overall take up of the scheme remains very low. It was originally envisaged that the scheme would facilitate approximately 500 cases a year with a total of 3,500 over seven years.
Deputy McGrath 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 supplied to me in the Dáil show that just 162 Mortgage to Rent transactions involving Approved Housing Bodies have been approved nationwide since its inception in July 2012. This represents less than 4 per month. Against the backdrop of 38,000 family home mortgages in arrears of two years or so, this is a truly abysmal performance by the scheme. There has only been a marginal increase in the rate at which cases are being concluded since the former Minister for the Environment Alan Kelly announced changes to the scheme amid much fanfare last year.
“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. I have been trying to work through the scheme on behalf of a number of families in mortgage distress and I have to say I have found it to be a bureaucratic nightmare.
“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.”