Thursday, 15 September 2022
Department of Housing, Planning, and Local Government
Mortgage Resolution Processes
203. To ask the Minister for Housing, Planning, and Local Government his views on whether the target of exceeding the 678 mortgage to rent cases completed in 2021 will be met in 2022; if not, if there are plans to initiate the previously mentioned consumer awareness campaign to target the 20,000+ homeowners still in long-term arrears; and if he will make a statement on the matter. [45227/22]
204. To ask the Minister for Housing, Planning, and Local Government the impact of the changes made to the eligibility criteria for the mortgage to rent scheme in January 2022 regarding the volume of applications to date; if the State-owned banks re-examined their long-term arrears cases following the changes to the eligibility criteria; if he will provide a breakdown on which lenders have made the greatest use of the scheme; and if he will make a statement on the matter. [45228/22]
I propose to take Questions Nos. 203 and 204 together.
The Mortgage to Rent (MTR) scheme was introduced in 2012 for borrowers of commercial lending institutions and is targeted at those households in mortgage arrears who have had their mortgage position deemed unsustainable by their lender under the Mortgage Arrears Resolution Process (MARP), who agree to the voluntary surrender of their home and who have very limited options, if any, to meet their long-term housing needs themselves. In addition, the household must be deemed eligible for social housing support. The concept of the scheme is that a household with an unsustainable mortgage goes from being a homeowner to being a social housing tenant.
To the end of June 2022, 1,905 households with unsustainable private mortgages have completed the MTR process and 635 cases are being actively progressed. A total of 5,602 individuals are benefitting from the scheme, which comprises of 2,892 adults and 2,373 children. The Housing Agency publishes, on a quarterly basis, detailed statistical information on the operation of the MTR scheme which also shows a breakdown of the number of active, completed, ineligible and terminated cases by lender. This information is available on the Housing Agency's website at the following link: www.housingagency.ie/housing-information/mortgage-rent-statistics
In 2020, 363 Mortgage to Rent cases were completed and in 2021, 678 cases were completed. Between January and June 2022, 223 cases were completed. The Mortgage to Rent scheme is a demand led scheme and is driven by lenders following active engagement by borrowers. Therefore, case completions are dependent on the level of borrower engagement that can be achieved by lenders, with the support of advisory services such as MABS and Abhaile, as well as the Department and Housing Agency's awareness raising initiatives. It is not envisaged that the number of completed cases for 2022 will exceed the number completed in 2021.
Both the Programme for Government and Housing for All commits to strengthening the Mortgage to Rent scheme and ensuring that it is helping those who need it. Building on the significant amendments already made to the scheme in 2017, the 2021 Review, which was published on the 24 January 2022, examined the impact of these changes and what further changes would benefit those in need of the scheme. While the scheme is performing well, it was assessed that some further enhancements were needed to enable more households in need of State support with their long-term housing needs to avail of this scheme.
One key priority action was to broaden the eligibility criteria of the scheme. This was implemented under the scheme on 14 February 2022. These include changes to the following aspects of the scheme, which will enable more borrowers to apply:
Positive Equity:Three new limits varying from €25,000 to €35,000 apply depending on the location of the property.
Property Acquisition Limits:Increases of up to 14% on the previous limits have been implemented across two threshold areas. These limits take account of current market conditions and the recent research by the Central Bank.
Flexibility on over accommodation: The scheme now allows flexibility on the over accommodation rule where a member of the household is aged 65 or over, or has a disability.
Approximately 8% of eligible cases submitted to The Housing Agency between 14/02/2022 and 30/06/2022 were deemed eligible as a result of the broadened eligibility criteria for property acquisition limits and over accommodation. My Department does not have sight of an individual borrower’s positive equity and so cannot statistically track the impact of this change.
My Department wrote to all the lenders involved in the MTR scheme and notified them of the changes to the eligibility criteria in advance of the effective date of 14th February 2022. In that letter, the Department requested that they take account of these changes when assessing borrowers for MTR.
Another action area within the 2021 Review is 'Communication and awareness raising'. There is continued engagement with Abhaile, the Insolvency Service of Ireland (ISI) and Money Advice and Budgeting Service (MABS) to disseminate information on the MTR scheme. Initiatives to increase the awareness of the Mortgage to Rent scheme are currently ongoing.
Full details of the recommendations and associated actions are outlined within the 2021 Review of the Mortgage to Rent (MTR) scheme for people who have borrowed from commercial private lending institutions and this review is available on my Department's website under Publications: www.gov.ie/en/publication/ed57b-2021-review-of-the-mortgage-to-rent-scheme-for-borrowers-of-commercial-private-lending-institutions/