Written answers

Thursday, 20 December 2012

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

To ask the Minister for Finance his views on the level of arrears across the buy-to-let mortgage book; the Government's strategy for dealing with the problem; and if he will make a statement on the matter. [57611/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy will be aware that the Central Bank of Ireland recently published its mortgage arrears data for end of September 2012 which, for the first time, included data on buy-to-let properties. This data can be found on the Central Bank’s website www.centralbank.ie and indicates that 17.9% of buy to let mortgage accounts (25.5% in terms of balance amounts) were in arrears of more than 90 days. The focus by Government is primarily on formulating and implementing appropriate measures to assist those homeowners who are experiencing genuine difficulty with the mortgage repayments on their principal home. In that regard, the Report of the Inter-Departmental Working Group on Mortgage Arrears (“Keane Report”) which was published in October 2011, made a number of key recommendations and the Government is now actively progressing the implementation of those main recommendations. However, some of these initiatives will also be of assistance in addressing significant ‘buy to let’ mortgage arrears and over indebtedness.

For example, the personal insolvency reforms will be of significant benefit to all insolvent debtors and their creditors as it will enable unsustainable debt positions to be addressed in a holistic way. In particular, the Personal Insolvency Arrangement framework for secured debt is formulated in such a way that it will also allow in the context of the whole of debt situation of the debtor for unsustainable ‘buy to let’ mortgage debts to be dealt with under arrangements formulated by the Personal Insolvency Practitioner and agreed between debtor and creditor. However, the particular protection provisions in the personal insolvency legislation regarding the principal private residence will not be available to ‘buy to let’ mortgages or any other secured debts.

Also, under the Mortgage Arrears Resolution structure overseen by the Central Bank, mortgage lenders are required to develop and implement appropriate resolution strategies and implementation plans for ‘buy to let’ mortgages as well as mortgages on the debtor’s primary home. In that regard, it is noted that 22,553 ‘buy to let’ mortgages were ‘restructured’ at the end of September 2012.


No comments

Log in or join to post a public comment.