Mortgage-To-Rent Scheme Has 'Effectively Collapsed' - FF

The Government's "mortgage-to-rent" scheme has "effectively collapsed" according to Fianna Fáil finance spokesperson Michael McGrath.

Deputy McGrath made the comment following confirmation that just 85 cases have been fully concluded under the scheme since it began in July 2012 – an average of fewer than three a month.

A root and branch review of the scheme is now needed to make it fit for purpose, Deputy McGrath said.

Under the mortgage-to-rent scheme, people in difficulty with their mortgage payments can switch from owning their home to renting their home as social tenants. Figures supplied to Deputy McGrath indicate that 2,748 cases had been submitted by the end of March 2015 for participation in the scheme, of which 68 per cent were deemed ineligible or were terminated during the process.

Deputy McGrath added: "It is a big step for a family to give up ownership of their house given that they may have put their life savings in to the home. However, the voluntary housing associations have indicated that, in the completed cases to date, tenants report being pleased to have removed the threat of repossession, allowing them to remain in the family home. The scheme has significant potential but it is simply not being realised at the moment. It represents a far better outcome than evicting people from their homes and forcing them onto the social housing list.

"The banks also need to step up to the plate and actively support the scheme. In this context, the question of what happens to the residual debt once the property is sold to a housing association appears to be a major stumbling block. The banks have to recognise that in some cases the debt is irrecoverable and they will have to write off a proportion of it. To date they appear to be very reluctant to recognise this fact and remain solely concerned with their own interests. Only determined action on the part of the government can break this logjam."

(MH/IT)