Legal rights group welcomes mortgage-to-rent scheme changes

FLAC (Free Legal Advice Centres) has said changes to the mortgage-to-rent scheme announced by Housing Minister Simon Coveney following a review by his department are encouraging.

However, the group has questioned the extent to which the changes will achieve their purpose.

Senior policy analyst Paul Joyce said the scheme “has to date largely failed to deliver results and any review that may help to significantly boost the numbers is helpful”.

However, he suggested that adjusting property price thresholds and removing roadblocks around repairing properties may not deliver any significant increase in numbers when more fundamental problems exist with the current scheme.

These include the ambiguous attitude of some local authorities, lender indifference, a lack of housing association coverage across the country and a lack of state investment in the scheme.

In four years 2013-2016, some 217 households have been accommodated under the existing mortgage-to-rent scheme, with 3575 applications submitted.

Mr Joyce said: “The Minister states that he wants to give Mortgage-to-Rent a ‘shot in the arm’ by testing alternative models that can deliver volume. It would be very helpful to have more detail of what he has in mind here.

“It is clear that certain financial institutions have signalled their interest in a new model, but what of those who have not?”

FLAC also noted that Mortgage-to-Rent was only one limited method of preventing the potential wave of homelessness from repossession of family homes.

Mr Joyce added: “Although a buy-back option in the future may exist, the reality is that most beneficiaries of the scheme will remain tenants.

“Meanwhile, mortgage write-down, which is a key mechanism under the personal insolvency legislation that potentially allows for the write-down of the debt on the family home to its current market value, allowing the borrower to remain the owner, is still mostly unused.”