Determined to keep distressed mortgage holders in their homes, Labour's Minister Jan O'Sullivan has concluded the first transaction under a new mortgage-to-rent scheme.

Ciarán Lynch TD said: "The family, living in West Dublin will now rent their home from the housing body Cluid, rather than face the trauma of repossession along with having to deal with both the upheaval and financial costs arising from securing alternative accommodation.

"As part of the scheme, the lender has written off a significant portion of the debt associated with the original loan and the Department of the Environment has provided 25% of the equity for the new loan. It is expected that more distressed borrowers will avail of the scheme as the pilot is rolled out.

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"The issue of households with Mortgage Arrears is one of the biggest social and economic problems facing the country, and Labour in Government is confronting it as a matter of urgency. It was a key policy priority in Labour's Manifesto in the General Election and was reflected in the Programme for Government."

Already the Government has published and is seeking to implement the Keane Report (2011), the recommendations of which reflected those made in Labour's manifesto. The Personal Insolvency Bill is seeking radical reform of Ireland's bankruptcy laws, providing for Debt Relief Certificates for those accumulating debts up to €20,000 and a Debt Settlement Process and Personal Insolvency Arrangement which would allow home owners to enter into an arrangement with banks in order to write down mortgage debt on a case by case basis.

Mortgage interest relief is also being increased to help those who bought at the height of the boom and to facilitate purchase by first time buyers, as outlined in the Budget speech and detailed today in the Finance Bill.

(CD/GK)