Filenews 30 June 2022 - by Theano Thiopoulou
The processes between the Ministry of Finance and the European Directorate of Competition (COMP) are culminating, shortly before the official request of Cyprus for the "Mortgage to Rent" project is sent. The question is what sizes will be included in the perimeter, because, it seems, the open line of communication that the ministry maintains with the European Directorate of Competition leads to a change in numerical figures.
At yesterday's meeting at the Ministry of Finance, with party leaders - representatives, The Minister of Finance Konstantinos Petrides informed that the request of the Republic of Cyprus for the rent-versus-instalment plan will be submitted in July, with changes in some points. According to information, the ministry's proposal does not seem to pass the mortgage to rent plan to include primary residence protection, the value of which will be up to €350,000. The European institutions lower the bar for the protection of the primary residence for vulnerable groups to €250,000, considering that a higher property value will not concern a financially vulnerable population. Also, in the draft prepared by the ministry, reference is made to the protection of business premises that has a mortgage on a property through the rent plan against an instalment. However, this does not go through COMP, as technocrats consider that the basic rules for the protection of competition between companies are not respected.
Yesterday, in the 19-page document presented by the Minister on the framework for the management of non-performing loans, a general reference is made to the plan, without giving further details. It is stated that there will be an automatic integration of vulnerable households that have NPLs with the guarantee of the main residence. Specifically, the unsustainable of the Estia scheme (those who have applied and been deemed unsustainable) will be included. So far, 759 applications are automatically included in the Mortgage to Rent scheme, if they wish, regardless of whether they fall within the perimeter of the plan and provided that they meet the criteria of the Estia scheme.
Paying rent to vulnerable people for 15 years
It is worth noting, however, that the perimeter of the Estia plan as it stands includes a house value of €350,000, something to which the EU Competition Directorate has strong objections, as mentioned above. The document notes that for the above categories (vulnerable) the rent will be paid in full by the state for a duration of 15 years, even if in the meantime they cease to be beneficiaries (e.g. for the recipients of UGS). The next step is to submit a notification to the European Directorate-General for Competition for approval of the plan, the budgetary cost of which amounts to €400 million, as reported by the Ministry.
