Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I and my Government colleagues are acutely aware of the challenges faced by households in mortgage arrears and who potentially are at risk of losing their homes. Rebuilding Ireland includes a range of actions that are targeted at assisting borrowers and ensuring that a range of suitable restructuring options is available that ultimately seeks to support borrowers to remain in their homes. As part of those actions I have sought, through the review of the mortgage-to-rent scheme, to ensure that those households who have no realistic prospect of returning to solvency can be supported to remain in their homes in a secure social housing tenancy arrangement thereby avoiding additional pressures on the rental and social housing sectors.

The review acknowledged that the current operating model, which relies on approved housing bodies to purchase individual properties, may not have the capacity to meet the needs of all borrowers who may be eligible for the scheme. In order to test the operability of alternative funding models for the scheme, the Housing Agency will work with a number of financial entities that have come forward with an interest in working with the mortgage-to-rent scheme to progress a number of pilot alternative lease arrangements. The contractual and lease arrangements that are required to secure these units from a local authority perspective require detailed consideration and the questions the Deputy has asked need answers. Overall, these pilot projects are in a developmental stage and my Department is working with the Housing Agency in this regard. I will be in a better position to set out in more detail how the pilot projects will operate and how the private investors will be selected when this development work is complete.

I have met a number of these organisations and most of them are not motivated by profit but they need a certain minimum rate of return to get funding and backing. Essentially, instead of banks having to deal with individual properties and individual approved housing bodies and selling the properties one by one, the banks would cluster groups of properties that would qualify for the mortgage-to-rent scheme, the owners would also qualify under the new more flexible criteria and we would put together a financial package, which would mean that we could deal with 20, 30 or 50 cases at a time, which would be in the interests of the borrowers and the banks concerned. The opportunity to deal with significant increased numbers will flow from that.

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