Mortgage-to-rent applications in limbo with local authorities

Housing Agency data shows seven areas in which not one case has been processed

Householders in serious mortgage arrears who are in “the wrong” local authority area, face difficulties accessing the Government’s mortgage-to-rent scheme, new figures indicate.

Wide disparities of participation by local authorities in the scheme are evident in the data from the Housing Agency, which show seven local authorities have not processed a single application.

Up to the end of last week a total of 2,984 cases of borrowers in severe mortgage arrears had been put forward for the scheme. Of these just 110, or three per cent, have been completed. Some 533 cases are active in the scheme, 119 at sale agreed stage and 81 “under offer” with the lender.

Some 395 were ineligible, 1,638 were terminated and in 43 cases the parties could not agree terms.

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Though the completion rate remains low, the data show the rates are even lower in some local authority areas.

Wexford County Council processed one application out of 110, or 0.9 per cent. Galway County Council has completed one out of 74 applications, or 1.3 per cent, while Cork County Council has completed three out of 161 applications, or 1.8 per cent.

The highest proportions completed have been in Waterford County Council, which has completed eight out of 110 applications, or 7.3 per cent, followed by Louth County Council with 11 out of 151 applications completed (7.2 per cent) and Dublin City, 19 out of 272 (6.9 per cent).

Correspondence released under Freedom of Information legislation between stakeholders and the Government’s working group on mortgage arrears indicates concerns about the coolness among some local authority officials to the scheme.

Also revealed are concerns about the funding model for the scheme, which relies on a healthy rental market to ensure the finances stack up for the voluntary housing association interested in taking on the property.

This issue may also explain the low success rate of the scheme in some local authority areas where the rental market remains depressed.

There have been calls for this model to be changed to ensure the state of the local rental market does not prevent otherwise eligible households from keeping their homes.

Cultural resistance

Brian O’Gorman, chief executive of Clúid, the largest voluntary housing association in the State, also warns of a “strong cultural resistance on the part of local authorities” .

In an email to the working group dated November 11th, 2014, he says: “Some in local authorities see mortgage-to-rent applicants as ‘queue jumpers’ who do not submit to waiting list criteria. We regularly encounter this thinking, even though the household is bringing a property to the transaction. The mortgage-to-rent applicants are not seen as a priority as they are deemed to be adequately housed.”

No mortgage-to-rent application has been processed since the scheme began three years ago in:

Donegal Council (51)

Mayo Council (43)

Monaghan Town Council (39)

Longford Council (32),

Roscommon Council (32) Sligo Council (18)

Galway City Council (15)

The number of applications made are in brackets

Kitty Holland

Kitty Holland

Kitty Holland is Social Affairs Correspondent of The Irish Times