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TODAY'S OTHER NEWS

Property litigation firm expects ‘a surge’ of repossession cases in London

There could be a significant increase in repossession cases in London once the tenant eviction ban ends this weekend, legal experts warn. 

Given that thousands of tenants have struggled to pay rent during the pandemic lockdown, property litigation specialists Hägen Wolf fears that many renters now face the prospect of losing their home from next week after the government’s temporary ban on evictions ends. 

The company points to Ministry of Justice data that shows London boroughs already account for nine of the ten local authorities with the highest rate of landlord possession claims. Barnet in north London had the highest rate at 120 per 100,000 households. 

Matt Pugh, the managing partner at Hägen Wolf, said: “While the number of landlord possession actions at all court stages are currently low due to the protections the government put in place we expect that we will see a surge when the measures are lifted.”

Landlord claims are down at least 89% in comparison to the same quarter of last year against April to June 2020. But that is now set to change. 

Some tenants who have been unable to pay have already received warning notices from landlords, and many more are now struggling to meet housing costs.

A number of landlords have agreed an affordable arrears repayment plan with tenants rather than moving to repossession proceedings, but others have been left with little alternative but to consider issuing a possession claim. 

But there is a greater burden on landlords, who must now disclose any knowledge they have of how the Covid-19 pandemic has affected their tenants and their dependants.  

Pugh added: “While the stay is being lifted it is not going to lead to anything being done quickly because of the enormous backlog of claims and warrants, and only limited court resources. The Ministry of Justice has opened additional courts to try and deal with the backlog.

“Landlords and tenants can expect many months before a hearing, and then another long wait before an eviction is listed, along with a possible rise in applications to suspend citing Covid-related defences.”

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    Let's hope that many of those scroungers who did not pay rent will soon start to be evicted......The more and the sooner the better.

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    ummm... considering the recent news = accurate reporting ?

    cue the vitriol ?!?

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    Agreed Seb, keep away from London, I will add though when a lender reprocesses a property they are able to get the tenants out immediately, no waiting about there, I don't think many people know that

     
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    Andrew, aside from the FCA saying that mortgage lenders must not start or continue court action for repossession until at least 31 October, and the tenant requesting the court to delay the possession date for up to a further 2 months, circumstances concerning "a binding tenancy" should not be glossed over either.

     
  • Paul Barrett

    I DON'T believe many LL are aware that if a BTL property is repossessed and there is a shortfall such the mortgage is not redeemed from sale proceeds then the lender will apply a charge to other properties the LL may own and potentially force the sale of those properties.
    LL who have multiple mortgaged properties will find that the lender will call in the other mortgages with the same lender whether or not the mortgages are being paid.

    Mortgaged LL should be selling up as fast as they can.

    There will be a lot more rent defaulting occurring when furloughing ends.
    LL beware bankruptcy is coming to you if you fail to rationalise your business!

    I'm sure many tenants aren't aware of how quickly a lender is able to repossess a rental BTL property.

    But these tenants won't care.
    Yes they will be removed very quickly but bankruptcy for the LL could possibly occur.

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    Yes spot on Paul

     
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    granted... 4 months is quicker than either 12 or 18 months but, I would neither describe it as quick nor immediate.

     
  • Paul Barrett

    Seb
    You DON'T get it do you.
    If LL are repossessed the tenants will be booted out pretty much immediately.
    2 months missed mortgage payments and lenders repossess.
    The best way for tenants to ensure a LL lender DOESN'T repossess is to pay the rent!!

    LL must surely very soon run out of resources to subsidise feckless tenants.

    There are about 1.5 million rental properties that are mortgaged.
    Those tenants occupying face repossession by lenders.
    Tenants cannot expect LL to subsidise them.
    LL have a choice of trying to sell or being repossessed.

    When furloughing ends we will start to see mass lender repossessions of BTL property.

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    Paul, what exactly is it that you're not getting - there is a queue for everyone, mass lender repossessions of BTL properties included. The more the merrier...

    the FCA have instructed mortgage lenders that proceedings for repossession must not start or continue through the courts until at least 31 October, and the tenant can also request the court to delay the repossession date for up to a further 2 months.

    December 31st, being the earliest possible date that a lender can have a tenant evicted, is not "booted out pretty much immediately" under any stretch of the imagination... and the likelihood is that the courts will slow it down even more if they are allowed to.

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    Sorry Seb but you are wrong, the law relating to mortgage re procession and that of landlord re procession is very very different .

     
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    Andrew, don't be sorry, just do the following and you will find all of the evidence for yourself:

    1) search for, FCA ""From 4 June 2020, these measures will:

    - provide you with options when your current payment holiday comes to an end to ensure that you continue to get support if you need it
    - ensure that if you have not yet had a payment holiday, but need one, you can still have one
    - extend the current ban on repossessions to 31 October 2020""

    2) search for, CAB ""If you're facing eviction because your landlord has fallen behind with their mortgage payments, you might have a right to stay in the property.

    If you don't have a right to stay, you can apply to delay possession of your home by up to two months. This could give you more time to find a new place to live.""

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