Housing Minister Darragh O’Brien to expand scheme in one of last acts in the role
In one of his last acts as Housing Minister, with the election just weeks away, Darragh O’Brien is to increase the purchase price of homes eligible under the scheme, with the changes kicking in from this Friday, November 1.
Under the scheme, homeowners who are struggling to pay their monthly mortgage give up their ownership of the house and rent it as a social housing tenant.
This means they pay affordable rents based on their income.
Their home is bought by either an approved housing body or an approved private company.
However, once the home is given up, they no longer own the home or have any financial interest in it.
The rule change is expected to help more struggling mortgage holders to stay in their homes. Over 7,000 people are already availing of the scheme.
From Friday, homes worth €515,000, up from €450,000, will now be eligible for the initiative, as well as apartments or townhouses worth €385,000, up from €335,000, in the areas of Dublin, Kildare, Meath, Wicklow, Louth, Cork and Galway.
In the rest of the country, houses worth €395,000, up from €345,000, will be included, as well as apartments or townhouses worth €265,000, up from €230,000.
The purchase price increase is an attempt to reflect the current housing market conditions.
There will also be a €15,000 increase to the positive equity limit across all regions to align with any changes to local house prices and market conditions.
Mr O’Brien said the demand for the scheme is why he is now expanding.
“This is why I have updated the criteria of the scheme in order to ensure that more people can avail of it, meaning that it continues to be a sustainable solution that keeps people living in their own homes,” he said.
“The mortgage-to-rent scheme offers a practical solution and gives individuals and families peace of mind by allowing them to remain living in their home despite facing severe mortgage difficulties.”
While most properties that qualify for the scheme should be in negative equity, those with small amounts of positive equity also can be included.
The limit on the amount of positive equity allowed differs depending on the location of the property.
Since the initiative began in 2012, 2,503 households have given up their ownership after falling into arrears and are now social housing tenants. This consists of 7,022 people – 3,922 adults and 3,100 children.
The Government hopes more people can stay in their homes as a result of changes to the initiative, which applies only for people who have mortgages with a private lender.
Homeowners must be unable to make repayments and their lenders have to decide this is not going to change in the future. They are also required to engage with their lenders to find a solution and take part in a Mortgage Arrears Resolution Process with their bank.
