THE almost 1,500 Kildare homeowners fearing imminent repossession were shown a fair-sized, end-of-tunnel torch last week with the news that the threshold value for the mortgage-to-rent (M2R) scheme has been bumped to just shy of €400,000.
Prior to this €30,000 increase, anyone in Kildare whose property was worth over €365,000 who hadn‘t made a repayment in over two years could not avail of this scheme to surrender ownership yet remain on as a local authority tenant indefinitely.
The M2R scheme was introduced in 2012 in an effort to address the hopelessness of those who faced imminent homelessness on account of their changed circumstances, and was operated solely by housing associations.
The scheme decreed the client must achieve three critieria – a) their home was in negative equity, b) they qualified for social housing, c) their home was valued below a given threshold.
However, as housing associations were more used to apartment blocks and estates rather than the one-off sector, the private sector was introduced in 2017 to speed along the process, albeit within the same rules.
An independent agent estimates the value of the property, which the association or M2R private operator will now buy off the bank which they will then lease to the council for a rent to be also fixed by an independent valuer.
The local authority now takes on the previous owner as a tenant on a manageable monthly rent for the foreseeable future, and the stress of homelessness is removed for the simple sacrifice of becoming a council tenant.
A total of 1,496 households in Kildare were in mortgage arrears for over two years at the end of 2018, according to the Central Bank, while over 1,200 of those had been in arrears for at least five years.
This figure is around 25,000 nationwide.
The upper limit on valuation for apartments stays at the same level of €310,000, the Department of Housing, Planning and Local Government announced.