Mortgage to rent scheme proposal could be solution for households
SENATOR Ged Nash has urged Housing Minister Eoghan Murphy to view the mortgage to rent scheme as a possible solution for many households in serious mortgage arrears.
An estimated 28,000 homes countrywide have been unable to make payments for at least two years and lastest Central Bank Long-Term Mortgage Arrrears in Ireland report show that 1,155 families in Louth are in this position.
Senator Nash worked in tandem with his Labour Party colleague with responsibility for Housing, Jan O’Sullivan, to table a parliamentary question to the Minister on this issue.
It followed a meeting with Paul Cunningham of Home For Life (HFL) in Leinster House where it was pointed out that only 33 households in Louth had availed of mortgage to life as a solution.
“The mortgage to rent scheme is an important option to consider to allow mortgage holders who are in severe and ongoing difficulty to remain in their homes while paying an affordable, differential rent based on local authority rates,” Senator Nash stressed.
Mr Cunningham explained that previously there had been legacy issues relating to the low pick up since the scheme was initiated in 2012, which is why his company entered the market last July as a government-approved provider. “However, since last year, there has been a great emphasis by all sides in seeing the mortgage to rent scheme as a solution. One of the reasons for this is that the whole process can now be completed within six month where before it took at least twice that length of time,” he emphasised.
In a written answer to the Labour Deputy, the Minister stressed that it was “a critical objective” to flag the mortgage to rent route to borrowers and help them to become more aware of what it could offer.
He claimed that one of the major issues affecting the operation of the scheme overall was the lack of borrower engagement with their lenders.
Mr Cunningham agreed with Mr Murphy that it was for people on the ground – solicitors, local councillors and Local Authority staff – to know the scheme worked so that they could brief constituents who found themselves in this sad situation.
“Fortunately we have seen a big improvement in this over the past number of months but there are still people who aren’t aware that mortgage to rent could offer a solution,” he stated. The HFL Chief Executive said that if householders met the criteria in terms of income limit and house value, there was a strong possibility a mortgage to rent company could solve many cases of serious mortgage arrears.
The company works with homeowners, lenders and the local authority to keep unsustainable mortgage holders in their current homes, avoiding upheaval for families.
Under the scheme, a property is sold to Home For Life and then leased back to the State through the local authority which, in turn, sublets the house or apartment back to the homeowner. The homeowner pays an affordable income-based rent to their local authority.
As part of the scheme in Louth, the local authority would then undertake to provide for the ongoing long-term housing needs of the applicant and other eligible residents of the property for as long as their housing need exists.