Ruth Coppinger (Dublin West, Anti-Austerity Alliance)
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258. To ask the Minister for Housing, Planning, Community and Local Government if a long-term 30 to 60 years plus cost benefit analysis of the proposed new mortgage-to-rent scheme was carried out to compare it to the cost benefit to the State of taking ownership of the homes and leasing them to the occupants, especially taking into account that many of the mortgages in question are owed to State owned banks. [8328/17]

Simon Coveney (Cork South Central, Fine Gael)
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The Mortgage to Rent (MTR) scheme for borrowers of commercial private lending institutions is now an established part of the overall suite of social housing options and an important part of the mortgage arrears resolution process.

The Review of the Mortgage to Rent Scheme, published on 8 February 2017, concludes that the current financial model of the scheme may not be capable of delivering the scale of successful cases that could benefit from the scheme over time. Currently, the MTR scheme relies on AHBs to purchase from lenders properties that have been voluntarily surrendered by eligible borrowers.

It is a clear priority of the Government to maximise delivery of social housing to cater for the greatest level of need, while also achieving value for money. The provision of social housing is carried out by local authorities and Approved Housing Bodies (AHBs) through a range of delivery methods, including construction, acquisition, leasing and other approaches, which allow local authorities, as housing authorities, to respond flexibly to meet local demand and operate within local property circumstances. Significant Exchequer support has been provided by Government to support this endeavour. While there are obvious social and economic benefits to be derived from the MTR scheme, most significantly by facilitating individual households in mortgage arrears to remain in their home, detailed consideration needs to be given to the impact on the capacity of local authorities and AHBS to meet the ambitious targets around new social housing supply in respect of any proposal to intensify their investment and involvement in the MTR scheme.

In parallel, the Government has been actively exploring potential mechanisms that would facilitate investment in the housing market, in particular social housing, in a manner that does not impact on the General Government Balance. A number of private equity firms have expressed an interest in purchasing mortgage debt portfolios from commercial banks with a view to exploring the potential for them to access the MTR scheme model for the borrowers in occupation of the mortgaged property. They are seeking an alternative arrangement that would see the mortgaged property staying in the funding firm’s ownership and the property itself leased back to the local authority in circumstances where the borrower is eligible for MTR and the borrower would therefore remain in their own home.

One of the outcomes of the Review is that in order to test the operability of alternative funding models for the scheme, the Housing Agency will work with a number of financial entities who have come forward with an interest in working with the MTR scheme to progress a number of pilot alternative lease arrangements. The objective is to explore what is available within the current market and to determine if this alternative model will benefit a greater number of households.

A detailed financial assessment of the structure of the funding of the MTR scheme will be undertaken in advance of the budgetary process for 2018. The assessment will be informed by the early impact of the other actions proposed by the review, as well as the outcome of the experience with the pilot lease arrangements, and the availability of financial resources overall, including in the context of the significant investment currently being made by Government through local authorities and AHBs in terms of developing new social housing supply.