Private tenants are 'forgotten victims' of housing repossession crisis

Published by Jon Land for 24dash.com in Housing

The Government was today urged to introduce greater protection for the rising number of tenants who are evicted because their landlord defaults on their mortgage.

Four housing charities have joined forces to publicise the plight of people in the private rented sector who are being made homeless because their property is repossessed.

Shelter, Citizens Advice, Crisis and the Chartered Institute of Housing said there had been a steep rise in people being evicted because their landlord had failed to pay the mortgage, despite the tenants keeping up with their rent.

A survey carried out by Crisis found that 60% of its advisers had been approached by people who had lost their home in this way, 80% of whom said the problem was increasing.

The charities estimate that more than 8,000 buy-to-let properties could be repossessed this year.

The groups said the tenants of these properties were the "forgotten victims of the repossession crisis".

They said in some cases people came home to find the locks on the property had been changed and their belongings were out in the street, and in other cases people were refused access to their things or were allowed into their home only briefly to get a few items.

The charities are calling for the law to be changed to allow courts to defer repossessions to enable tenants to find new accommodation. They said urgent Government action needed to be taken to avoid a crisis.

They have written to MPs urging them to sign an Early Day Motion calling for the law to be changed to tackle the problem.

The groups added that more also needed to be done to make tenants aware of repossession proceedings, such as getting the courts to send notices that were clearly marked "to the tenant" of a property, in addition to notices that are currently sent "to the occupier" by mortgage lenders.

As the law stands, most tenants have none of the legal rights that usually protect people in rented property from losing their home at short notice.

Advisers working for the charities said they had seen cases where the first the tenant knew about the situation was when they came home to find bailiffs in their property.

In one instance a family had to spend the night sleeping in their car, before being moved into emergency hostel accommodation, because their rented home was repossessed.

Shelter chief executive Adam Sampson said: "Shelter has seen a steep rise in the number of tenants who have kept their side of the bargain by paying their rent but who are being thrown out on to the street because their landlords have defaulted on the mortgage and the house has been repossessed.

"With more and more landlords struggling with mortgage arrears and tenants facing repossession, the Government must allow the courts to defer possession dates so that tenants can find other suitable accommodation."

Leslie Morphy, chief executive of Crisis, said: "At a time when many people are focused on homeowners, we risk forgetting that tenants of private landlords are extremely vulnerable to the recession.

"It is outrageous that the first time some people discover they are going to lose their home is when the bailiffs ring the doorbell.

"Tenants need legal protection to ensure that they at least have reasonable time to find somewhere else to live. The alternative too often can be homelessness."

The Council of Mortgage Lenders said many lenders would consider continuing a tenancy if a landlord got into difficulties, with the tenant paying their rent directly to the lender for the period of the tenancy.

But it said in some cases, landlords might be renting out a property that had an owner-occupier mortgage on it, without the lender's knowledge.

It warned that this breached the terms of the mortgage, was potentially fraudulent, and disadvantaged both the lender and the tenant, who would be unaware of each other's interest.

CML director-general Michael Coogan said: "Everyone sympathises with those tenants who are paying their rent, and fulfilling their obligations, but who find that their landlord has not been paying their mortgage and have not told their lender that they are renting out the property.

"Good tenants should not be disadvantaged, and nor should lenders, by the irresponsible behaviour of a small minority of landlords.

"We look forward to working with the Government and advice agencies on effective measures to help the modest number of tenants affected."

A spokesman for the Department of Communities and Local Government said: "We are determined to make sure that tenants facing eviction through no fault of their own are protected.

"From April 6 tenants will get the maximum possible notice of possession proceedings that may affect their home, meaning that, rather than two weeks at present, they will get nearly two months to make alternative arrangements.

"We are looking to see what more help we can provide for tenants, be that legislation or influencing lender behaviour.

"In the first instance, it is vital that landlords struggling with their payments contact their lender."

Simon Gordon, Head of Communications at the National Landlords Association, said: "We think it is absolutely right that we should be looking at offering further support for the small number of tenants affected by buy-to-let landlords who have their properties repossessed.

"It is also important to remember that, for the most part, buy-to-let landlords only experience problems with their mortgage if their tenants fail to pay their rent.

"Our latest research shows that 37 per cent of landlords are currently experiencing some form of rental arrears. This is bound to have an impact on the level of repossessions.

"Tenants may have difficulty meeting their rental payments but a failure to do so may put them at immediate risk of losing their home and the landlord at risk of losing their livelihood."