Time for action to help private tenants at risk of repossession

Good news this week as three leading national housing bodies and Citizens Advice Bureau(CAB) have joined the campaign calling for the Labour Government to take action now to help private tenants if their landlord's property is repossessed.

I highlighted this issue as a major concern back in February, given the size of Reading's private rented sector (double the national average) and numbers of people who could be vulnerable.

I received a response from officers at Reading Borough Council although to be fair this is an issue which needs national government intervention.

This issue matters. Last year 1,500 people in Reading lost their homes and we know that the number of people at risk of repossession locally is growing. We studied the impact of the credit crunch specifically on housing at the last meeting of the HHCC Scrutiny Panel and will continue to monitor this area.

Crisis, Shelter, CAB and Chartered institute of Housing are lobbying the government for a change in the law to allow possession to be deferred to allow tenants time to find other accomodation.

Taken from the CiH website...

WHAT THE LAW SAYS: If a lender has started proceedings against a tenant's landlord, the lender is required to send notice of the possession hearing, addressed to 'The Occupier', at least 14 days prior to the hearing. From 6 April 2009, the lender must send a notice to the property within five days of receiving notification of the date of the court hearing. However the notification letter will still be addressed solely to 'the Occupier'.

Tenants who moved in after the mortgage was taken out generally have no rights to stay in the property once it has been repossessed. A lender will be able to take action to have any occupier evicted as part of the action to repossess the property.

The website also contains some useful advice for tenants:

• Always open mail addressed 'To the Occupier'. This may include notice of any possession hearings.

• If you're thinking of moving into a new property, make sure the landlord has permission from the lender to rent it out. Otherwise, the lender does not have to recognise the tenancy at all.
• If you were already living in the premises at the time when the mortgage was taken out, the lender may take you on as a tenant and allow you to pay rent to them directly. If you think you may be in this position, contact a Citizens Advice Bureau or Shelter.
• Try to find out as much you can about your prospective landlord and his/her mortgage status before taking up a tenancy - although in practice this isn't always very easy.

An Early Day Motion has been tabled in the House of Commons and I will be urging MPs to sign it.

If you or anyone you know is affected by any of the above issues please feel free to contact me direct: redlandslibdems@hotmail.co.uk

UPDATE.

I have received this email today from the office of Sarah Teather MP, Lib Dem housing spokesperson:

"Thank you for your email to Sarah Teather MP.  Sarah and the parliamentary Lib Dems will be strongly supporting this Early Day Motion, and have been pushing the government to change the law to protect private tenants."

Comments

[Jock]

Better still, form a Community Land Trust type vehicle and use a new vehicle called an asset partnership which I am writing up to present at Reading University next Tuesday at a SEEDA/CommercialISE business plan competition day (so I can't give you a copy yet as that's my weekend's work!) and offer the lenders the opportunity to be the capital partner in exchange for an index linked proportion of the rent. This would allow the tenants to start building up some equity (and at lower rents than most in Oxford pay for private renting in any case) which they can take with them if they move between properties also in the CLT or sell on to the next tenant or even back to the lender/capital partner for cash.

Extra time in the form of new regulations would be a minor help - particularly with the immediate trauma of finding your belongings out on the street one night when you return home as has apparently been happening (perhaps the law should also say tenants should have twenty-eight day orders to leave after the repossession order is made) but it doesn't really solve much else longer term.

Councils could even use their cash balances under their duty to help *prevent* homelessness now to kick start the scheme as the first "capital partners" and receive a yiled better than they do currently on the money markets to boot. And use their relationships with their bankers to encourage them to participate.

It would be primarily a local scheme (we're thinking of just Oxfordshire for ours) though replicable and extendible - could be used anywhere. Using a CLT would mean longer term community ownership of the private sector rental market which would have other benefits. Such as efficiencies of scale in buying goods and services for the homes under management - no more trashy sofas and broken washing machines - and improved standards all round.