Mortgages -
More Homeowners May Face Repossession - 11/05/2008
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As credit crisis hits harder, growing numbers of landlords risk having their homes repossessed as they fail to keep up mortgage repayment. And hundreds of tenants could also face evictions without notice as lenders repossess homes belonging to defaulting owners.
Official figures released last week suggest that the number of people threatened with repossession due to their inability to keep up repayment shot up by 16 per cent in the last year.
Housing charities are warning that it is not just the owners who face the risk of losing their homes, but many tenants will also face eviction, usually because the landlord had the wrong type of mortgage.
Chief executive of Shelter, the housing charity, Adam Sampson said they have had a number complaints from people that have been forced out of their homes.
“If the credit crunch continues we are going to see many more repossessions and many more tenants being evicted. They are the unheard victims of this crisis,” he said.
A buy-to-let mortgage, necessary to rent out a property, usually comes with a six-month tenancy agreement between the lender and the landlord. This, in theory, allows the tenant to remain in the property up to six months after its repossession.
But many landlords have avoided these loans deliberately or by failing to switch mortgages when they moved to let the property.
This is unfortunately not known to the tenant until they are forcibly evicted by bailiff, explained Sue Anderson of the Council of Mortgage Lenders, adding that: “There is a real risk of more of these cases as repossessions become more common.”
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