Mortgage-to-rent scheme helps, but thousands will still struggle
UP to 10,000 people may eventually benefit from new schemes that would see them giving up ownership of their homes but getting to stay in the house and renting it instead.
However, these new mortgage-to-rent schemes will be limited to those who have unsustainable mortgages.
In other words, you will need to be in a situation where you are unlikely to ever be able to meet the payments because your income has been destroyed, and you are facing eviction.
Also, those families benefiting will have to be eligible for social housing.
For most parts of the country this means a family will not qualify if there is an income of more than €42,000 between three adults and four children.
The deal involving GE Money is the first of its kind in the country.
Now the Department of Environment, under the guidance of Housing Minister Jan O'Sullivan (below), is to launch a pilot scheme involving AIB and its subsidiary EBS.
How many struggling families eventually benefit from mortgage-to-rent schemes will depend on the amount of housing funding the Department of Environment can secure.
Some €400m has been allocated to the department this year for social housing, but not all of this will be used for the new mortgage-to-rent schemes.
If there is funding, lenders are likely to find the schemes highly attractive as it will allow them to offload troublesome mortgages.
The alternative is a repossession for a house they will be unable to sell.
One thing is for sure -- there will be no free lunches.