Significant changes to Mortgage to Rent Scheme to
majorly increase numbers of households benefitting

Minister for Housing, Planning, Community and Local Government, Simon Coveney, T.D., today announced significant changes to the Mortgage to Rent Scheme that will see a major increase in the numbers of households benefitting. It is important to note that availing of this scheme is a matter of choice for the mortgage holder. In addition, households who benefit from Mortgage to Rent become social housing tenants, with the same security of tenure and differential rents based on household ability to pay. 

Speaking today Minister Coveney said “I am pleased to be able to publish the Review and set out a series of actions and amendments that will make Mortgage to Rent (MTR) quicker, more transparent, easier to navigate for borrowers and ultimately, more accessible to more households in mortgage distress. Crucially, the changes will also dramatically increase the numbers of households availing of the scheme”.  

The Minister acknowledged that mortgage arrears can be extremely distressing for families. At the extreme end of mortgage arrears where household may be facing the trauma of losing their homes, mortgage to rent is intended as the solution to take that trauma away and allow households remain in their family homes. 

Recent Central Bank statistics on mortgage arrears show that the level of arrears is declining. But the Government is concerned that there remains a significant number of borrowers in long-term mortgage distress who have no prospect of a significant change in their circumstances in the foreseeable future. The scheme so far has not had the capacity to deliver significant scale or volumes of transactions. 217 transactions have been completed to date with a further 635 reaching conclusion. Up to now, the Mortgage to Rent scheme has relied on single transactions by Approved Housing Bodies (AHBs) buying lenders properties that have been voluntarily surrendered by eligible borrowers. 

The Minister said “I want to give Mortgage to Rent a shot in the arm by testing alternative funding models that can deliver volume. The Housing Agency will work with a number of financial entities who have come forward with an interest in working with the MTR scheme to progress a minimum of 200 units based on these new arrangements. The objective is to see how we can structure the scheme to benefit a greater number of households. The new funding arrangements, increased flexibility and expanded scope in terms of eligible properties will enable us to do that”.

The Review represents the completion of an early action in the Government Rebuilding Ireland: Action Plan for Housing and Homelessness. It follows broad consultation on the operation of the current scheme which was originally developed in 2011.

“The Housing Agency will work with a number of financial entities who have come forward with an interest in working with the MTR scheme to progress a minimum of 200 units based on these new arrangements.“

As part of the amendments that will be made, a more formal communication protocol between the lenders and borrowers is being proposed; several changes to the eligibility criteria of the scheme are being made which will mean more households in rural areas, in particular, will be eligible; conveyancing, valuation and repairs process are all being refined; and a significant borrower, lender and local authority awareness raising and training programme are being initiated. Furthermore, the key role of the Abhaile Service, the Insolvency Service and the Money Advice and Budgetary Service (MABS) are all being harnessed as critical to the successful delivery of the scheme.