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Repossessed houses to be used for subsidised rent schemes

Properties repossessed by the banks over mortgage defaults are to be used by the government as ‘council housing’ for financially and socially disadvantaged groups.

The measure was presented by the Portuguese Government on Friday last week through the Ministry of Welfare and Social Security.

It forms part of a wider Social Emergency Programme (Programa de Emergência Social) to tackle Portugal’s rising poverty problem as unemployment levels top 12% nationwide with some areas such as the Alentejo and Algarve suffering from up to 22-25%.

According to the Portuguese National Statistics Institute, 1,800,000 are at risk in Portugal of poverty in a country of around 10 million inhabitants.

Of those, 339,000 get social welfare help (rendimento social) because 43.4% of the population is considered either poor or at risk of poverty.

Thirty-seven per cent of the population is believed to be ‘vulnerable’ while 25% are at risk of economic and social exclusion.

One million pensioners are living on a minimum pension of around €227-247 a month and the unemployed are receiving an average of €527.94 a month.

The properties have been seized by the authorities, usually the courts or tax authorities, because either families or developers have failed to meet mortgage or bank loan payments.

The properties will be made available for social housing for rental rates below those currently available.

The Government has already made contacts with the national state bank Caixa Geral de Depósitos (CGD) but intends to widen the ‘invitation’ to other banks.

The measure is just the first phase of a programme put together by the new PSD Government of Pedro Passos Coelho and the National Association of Portuguese Municipal Councils (Associação Nacional de Municípios Portuguesas) with the banks – at least 1,000 properties are to be made available.

The inspiration for the measure has come from Vila Nova de Gaia and its leading public figure Marco António Costa who is currently the secretary of state for welfare and social security and had been vice president of the town’s municipal council when it launched its Arco-Iris Programme (Rainbow Programme) which made 40 properties available to young people with financial difficulties for around €250 a month in rent.