Australian bank Macquarie and the Irish property management unit of outsourcing services group Aramark are among parties that have been shortlisted by the Government for its planned reboot of the mortgage-to-rent scheme, according to sources.
The Department of Housing and the Housing Agency launched a call in July for expressions of interest (EOI) from private and approved housing body sector entities interested in becoming mortgage-to-rent (MTR) providers, capable of delivering “at scale”. Under the MTR structure defaulting borrowers can remain in their homes as renters after agreeing to surrender ownership of the property.
Macquarie – believed to be acting through its Broadstone Housing unit in Ireland – and Aramark are working together. Another organisation called Lambay Investments, led by Ivan Gayler, is also said to be among three groups that have been brought into a second stage of the process. The identity of the third could not be confirmed.
Home for Life, the only private sector participant in a previous pilot scheme and who submitted an EOI for the new programme, has not been invited into the second stage, according to sources. O’Dwyer Real Estate Management, which provided services to Home for Life before a legal dispute erupted between both parties last year, also filed a bid, but has not been shortlisted.
Still, it is possible that the department, which is seeking to appoint three private MTR providers alongside three approved housing bodies, may yet include some parties that were not invited into the second stage, according to observers. Officials, advised by PwC, have only begun to focus on the funding models of selected parties in the second phase.
Representatives for Macquarie, Lambay Investments, which filed its interest under an entity called MTR Homes, and Home for Life, declined to comment. Efforts to secure comment from Aramarch and O’Dwyer Real Estate Management were unsuccessful.
The department officially terminated the pilot scheme on May 25th but missed its own deadline for starting a new expressions of interest process in a successor scheme at that stage. While officials envisaged in September that the process would be completed by mid-October, it is now not expected to conclude until early next year.
iCare, an approved housing body (AHB) led by David Hall, an advocate for distressed borrowers, is understood to be one of two AHB’s being assessed for the non-private-sector element of the new MTR plan.
The fear, according to observers, is that the drawn-out nature of the process and requirement for new operators to set up MTR platforms and engage with lenders holding problem loans will result in very few cases being completed next year.
Some 2,258 mortgage-to-rent deals have been completed since an initial scheme was launched in 2012 on foot of a recommendation in a government-commissioned report on the mortgage arrears crisis at the time. A tweaking of the scheme in 2017 gave rise to the pilot programme that had been operating until May.
Home for Life, the only private sector participant, which is led by chief executive Paul Cunningham and funded by UK investment firm LCM Partners and AIB, had completed 1,145 cases by the end of September, according to Housing Agency figures.
The agency suspended Home for Life from taking on new cases late last year, as it worked through repairs and remedial work on its existing portfolio. There had been a backlog of inspections by local authorities on properties as a result of the Covid-19 pandemic. It allowed Home for Life to restart the completion of active cases in May.
iCare, the second largest player, had completed 483 cases by the end of September.
The 2020 programme for government and the Government’s Housing for All plan, unveiled the following year, had each committed to strengthening the scheme and ensuring it was available to those who need it.
Irish mortgage default cases have fallen from a peak of almost 13 per cent of owner-occupier home loans in 2013 to 4.1 per cent as of the end of September, according to the Central Bank. However, almost half of the 29,346 cases where borrowers were at least 90 days behind in repayments were instances where borrowers were more than five years in arrears.
