THE STATE’S MORTGAGE-TO-RENT scheme has been strengthened in a bid to allow more people in mortgage arrears stay in their homes.

The Minister for Housing, Local Government and Heritage, Darragh O’Brien today announced a number of significant improvements to the scheme for people who are at risk of losing their homes due to mortgage arrears.

The scheme offers households in unsustainable mortgage arrears situations, with little or no prospect of a significant change in circumstances, the chance to surrender a property to a lender and in turn become a social housing tenant whilst staying in their own home and community.

Option to buy back

As part of the scheme, the home will be brought up to private rental standards. There is an option for tenants to buy back their home within 25 years under the scheme. 

As of 14 February, key changes will kick in, such as an increase to the positive equity limit, which is being adjusted by region to align it with the range of house prices and market conditions across the country. 

Purchase price thresholds will also be updated to take account of current market conditions and there will be additional flexibility in the number of allowable bedrooms in a dwelling (this will apply for borrowers aged 65 and above, and borrowers who have a disability, or where a dependant has a disability).

O’Brien said today that the changes will result in more people being able to benefit from the scheme, which has been amended to reflect current housing market conditions and most up-to-date research on those in long term mortgage arrears.

Last year, there were 670 cases under the scheme, but the minister said today the government wants to hit at least 1,000 cases per year under the plan. 

He said some people are in “very difficult” situations, and this will be an option for them. 

“I want more people to have more certainty that they are not going to lose their homes,” he said. 

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Mortgage arrears

Over 20,000 households have been in arrears for more than two years, said the minister, adding that at some point the government had to “grasp the nettle” in dealing with the issues and finding solutions. 

While he said this scheme might not be a solution for everyone, it will help some people stay in their homes and in their communities. 

Speaking at the announcement, iCare Housing CEO David Hall said the Government changes to the Mortgage-to-Rent scheme are good news for those in mortgage difficulties throughout the country.

“As an Approved Housing Body helping people with acute and unsustainable mortgage arrears to start afresh, we’re pleased to see scheme changes that will give more people a chance to stop the clock on financial stress, strain and uncertainty about the future and secure their housing situation.

“I’ve no doubt that these changes will give more families to chance to start again whilst staying in their own homes and communities.”

He said there are estimates that nearly 16,000 households are at risk of losing their home. The new changes could make between 6,000-7,000 more people eligible for mortgage to rent, with an option to buy back.