Mortgage arrears scheme valuation raised to €395K

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Families in mortgage distress in Wicklow have been given fresh hope after the county’s upper housing valuation limit for the mortgage-to-rent scheme was significantly increased to €395,000.

This €30,000 rise from the previous mark allows many homeowners in unsustainable mortgage debt to now qualify as part of the expanded scheme which became operational this week. It will allow those previously above the upper ceiling limit of €365,000 the opportunity to seek reassessments of their cases. However, the upper limit on valuation for apartments stays at the same level of €310,000, the Department of Housing, Planning and Local Government announced.

A total of 826 households in Wicklow were in mortgage arrears for over two years at the end of 2018, according to the Central Bank, while over 630 of those had been in arrears for at least five years.

The CEO of mortgage-to-rent operator Home For Life, Paul Cunningham from Bray, said the decision to introduce a more realistic upper threshold showed a commitment to finding solutions for as many of the estimated 25,000 families in serious mortgage arrears in the State as possible.

sends a message out to those in financial trouble that there is a way back

“This sends a message out to those in financial trouble that there is a way back and by increasing the threshold, the Government is showing it believes mortgage-to-rent is a scheme that can work for all sides,” said Mr. Cunningham.

Well-known homeless champion, Fr Peter McVerry, described the expansion as a step in the right direction.

“This is a small step because in my view mortgage-to-rent should be expanded to include most unsustainable mortgages. I would include in that the 12,000 buy-to-let mortgages of two or more years in arrears,” he said.

“I believe that alongside the current increase in house value thresholds there should be a rise in the income limits which apply to mortgage-to-rent.”

a small step

Minister of State with Special Responsibility for Housing and Urban Development, Damien English, said the changes would enable more properties to qualify for the scheme. The Minister also welcomed the rise in the number of mortgage-to-rent cases completing.

“This confirms that the scheme is a good solution to unsustainable mortgage arrears and one that is being recognised as such by the borrowers,” said Minister English.

The government’s mortgage-to-rent scheme aims to keep owners with unsustainable debt in their current homes debt-free as long-term tenants of their local authority.

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