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Renters at risk in repossessions

6 August 2015

Thousands of tenants in the private rental sector face eviction at short notice when their homes are repossessed, according to Citizens Advice.

The national charity’s new report Renting in the recovery, reveals up to 6,800 tenants are evicted every year when landlords get into mortgage arrears.

The report finds renters in the private sector often don’t get the protection they are entitled to if a landlord is repossessed, with some tenants only finding out they are being evicted when bailiffs show up at their door.

Citizens Advice fears cases like this could increase when interest rates rise and some landlords struggle with higher mortgage repayments.

The charity looked at the number of people evicted due to landlord repossession as well as predictions for how much repossessions will rise as interest rates increase. The analysis shows that by 2017, up to 8,160 private renters per year could be evicted because their landlord’s property is being repossessed.  

The report warns that tenants whose landlords don’t have a buy to let mortgage or haven’t had agreement from the mortgage lender to rent out the property are at particular risk. These tenants have the right to two months’ notice, but have to take action, which sometimes involves going to court, to receive this. Citizens Advice reports many tenants are not aware of this right and lenders sometimes don’t make it clear when notifying tenants they have to leave.

Problems are compounded as lenders often send repossession notices ‘to the occupier’, meaning tenants frequently mistake eviction notices for junk mail.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Thousands of renters are being repossessed with little or no warning.

“Citizens Advice helped one tenant who was given only three days’ notice to leave his home when his landlord’s property was repossessed. As interest rates rise, there is a risk that more tenants will face repossession and the prospect of homelessness.

“Banks have an opportunity to help tenants whose landlords have the wrong mortgage by making sure they inform tenants face-to-face of their rights if they are at risk of losing their home.”

Citizens Advice’s warning comes after the Bank of England Governor said interest rates are likely to increase towards the end of the year.

Interest rates have been at historic lows of around 0.5 per cent for six years as the UK economy recovers from the financial crisis. Low interest rates have kept mortgage costs low, and Citizens Advice says many homeowners may struggle to pay for the increasing costs of housing as they rise.

Landlords may try and raise rents to cover increased mortgage costs when interest rates rise. Previous Citizens Advice research revealed that nearly half (49 per cent) of renters have not made plans to deal with any rent increase.

Citizens Advice warns tenants to always open post addressed 'to the occupier' - this can in some cases be a notice of eviction.

Renting in the recovery recommends:

  • Lenders should make face-to-face visits to properties at risk of repossession to notify people in person that their home is at risk and what their rights are.

  • Letting agents should always ensure landlords have a buy-to-let mortgage, or permission from the lender to let the property.

  • Banks should send repossession letters to named tenants wherever possible, and in all cases clearly marked with a notice saying the home is at risk.

  • Where landlord licensing schemes exist, they should include a condition that a landlord must have the lender’s permission to let a property

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Notes to editors

  1. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To get advice online or find your local bureau in England and Wales, visit citizensadvice.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
  5. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.