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Renters at risk if interest rates rise

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Thousands of tenants who rent from a private landlord face eviction at short notice when their homes are repossessed by their landlord’s mortgage company.

Recent statistics published by the Citizens Advice Bureau show that up to 6,800 tenants are evicted every year when landlords get into mortgage arrears.

These figures are likely to increase should the interest rate rise as predicted early next year. Many homeowners will struggle to meet this rise in interest rates and more will fall into arrears. Landlords may also try to meet the increased mortgage costs by increasing rents which many tenants would not have planned for or be able to afford.

If the landlord has a buy to let mortgage or has had the agreement of the mortgage company to let the property the mortgage company would take over the tenancy if the property was repossessed meaning the tenants could remain in the property for the remainder of their tenancy. 

The Mortgage Repossessions (Protections of Tenants etc) Act 2010 seeks to offer some protection to tenants whose landlord is facing repossession and does not have the consent of the mortgage company to let the property. The act provides tenants with the right to request a delay to eviction of up to two months.

The mortgage company is obliged to make the occupier of the property aware of any possession proceedings and when a warrant for eviction is applied for. At either of those two stages a tenant can make a request to the mortgage company to delay the date for possession by up to two months. If the mortgage company refuses or does not respond, an application can be made to the court. The mortgage company can request that any rent due during the two months delay is paid direct to them. A tenant can only make the application once but if the court is satisfied that the tenancy is genuine they should allow the application.

It is important to be aware of this risk. Some tenants may not open a letter addressed ‘to the occupier’ believing it to be junk mail.  However this could be a notice of eviction from the mortgage company.

If tenants receive notice of possession proceedings or a notice of eviction it is important to seek specialist legal advice from a housing solicitor as early as possible. Stephensons have a dedicated housing department who can offer specialist advice and assistance.