An increasing number of houses bought with the help of local authorities during the boom are being repossessed in Dublin and Cork, while councils nationwide face mortgage arrears on up to 45% of loans.
In Dublin City alone, 52 houses bought under the shared ownership scheme have been repossessed and it is estimated that 30% of the remaining 1,523 shared ownership homes are in arrears. Dublin City Council said it was likely to have to repossess another 20 in the short term.
In Co Cork, arrears have reached a shocking 51% and a number of repossessions have taken place.
Cork County Council did not provide details on the numbers repossessed but admitted more are likely.
Local authorities have sought legal advice from the Department of the Environment on how to tackle the problem. If they repossess a house, the householders will still have to be housed somewhere and very often return to the same housing department seeking to join the regular housing list.
The shared ownership scheme was aimed at people who could not afford to buy their home in one go, allowing them to start by buying a proportion of a home with the local authority, increasing their ownership in steps until they owned it all.
However, while mortgage arrears is a serious issue for all the bigger local authorities, responses vary widely.
In Fingal, 22% of its 254 shared ownership houses are in arrears but a spokeswoman said: “Fingal has not repossessed any homes and has not made any moves towards repossessing any of these homes. The cases are being managed in-house.”
In Dún Laoghaire/Rathdown, 45% of its 88 shared ownership loans are in arrears but no homes have been repossessed. Legal action has begun against some loans which the council described as “unsustainable”.
A spokeswoman said: “Shared ownership loans make up 22% of the council’s total loan book. However, the arrears in this sector accrued amount to 80% of total loan arrears. Further guidelines in relation to local authority mortgage arrears are awaited from the Department of Environment, Community, and Local Government.”
In Cork City, there are 73 houses on which loans are owed under the scheme. Up to 40% are in arrears but there have been no repossessions. The council does not intend repossessing any homes at present.
In Limerick City, 64% of 33 shared ownership loans are in arrears. No homes have been repossessed and no moves are being made toward repossession.
Politicians warn that after repossession, householders can have trouble getting on the regular local authority housing list as they are officially voluntarily homeless.
Sinn Féin housing spokesman Dessie Ellis said: “It should also be the case that those who give up the shared ownership should be allowed to go on the waiting list for housing again and not treated as voluntarily homeless. In many cases it would be appropriate for these people to be housed as tenants in the home they have surrendered.”
A Department of the Environment spokesman said a commitment had been given to issue new guidance to local authorities before the Dáil summer recess. “Local authorities can and do exercise the powers available to them under section 11 of the 1992 Housing Act and endeavour to engage proactively and constructively with a distressed borrower with the aim of enabling a household to remain in that home. The available data strongly bears this out and suggest that repossession, where it does occur, is always a last resort,” he said.
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