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Generation Rent wants special deal for tenants when landlords default

The Generation Rent group of activists has written an open letter to mortgage firm chief executives asking for special dispensation for private rental tenants.

Ben Twomey, the group’s chief executive, is asking the lenders not to evict tenants from the home of landlords who have defaulted on their mortgages. 

The full text of the letter is below.

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Dear CEO,

Given the rising numbers of repossessions of landlords by mortgage lenders, I am writing to find out what your institution’s policy is on repossessing the properties of insolvent landlords and evicting the tenants, and to request a meeting to understand how such tenants could be protected during this period of uncertainty in the mortgage market. 

Due to the significant public interest in this area, we will be making the text of this letter, which we are sending to all major mortgage lenders, public on the Generation Rent website.

We know that lenders have a right to evict the tenant of homes they repossess from landlords, using Section 21 or Section 8 Ground 2 of the Housing Act. However, I am sure you are aware that eviction resulting from the actions of someone else is a very disruptive act with often severe consequences for the tenant that should be avoided wherever possible.

A no-fault eviction results in stress for the tenant, particularly when rents have been rising as they have been. Finding a new, affordable place to live can drag tenants away from their workplaces, families and schools. We estimate that the upfront costs of moving for the typical private renter household is £1,700, which they must often borrow to meet. Many evicted tenants end up homeless and living in temporary accommodation. Someone’s home is the foundation of their life; taking it away so easily can have devastating consequences for them and their families.

We know from UK Finance that there are approximately 2 million buy-to-let mortgages in the UK. The sharp rise in interest rates has put many of them under significant financial pressure, with the Bank of England estimating that by the end of 2025, 40% of those mortgages could face mortgage costs of more than 80% of the rent being received.

On 10 August, UK Finance reported that lenders repossessed 440 buy-to-let properties in the second quarter of 2023, while a further 2000 landlords are more than 10% behind on their balance. We can only expect that more properties will be in this position, and we believe that lenders have a moral obligation to ensure that these tenants can stay in their homes.

The Government and lenders have already agreed measures to provide forbearance to owner occupiers, including the ability to pay their mortgage on an interest-only mortgage for a period. Such steps are less useful for landlords who are often on interest-only mortgages already. It therefore seems likely that landlords behind on mortgage payments are at a higher risk of repossession and there is nothing their tenants can do about it.

I would like to know what your institution is doing to prevent tenants from losing their homes if their landlord is repossessed, and if you have a policy of acting as or appointing a receiver of rent to allow tenants to stay in their homes and carry on with their lives.

Yours sincerely,

Ben Twomey,

Chief Executive, Generation Rent

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    I would love to be a CEO and write back and tell him how many landlords’ mortgage redemptions there are and how Gen Rant & Co are responsible for the associated higher rents and tenants losing their homes due to landlords going.

    Peter Why Do I Bother

    I think if he sent that he is more stupid than he looks and I would have three words for him GGF..

     
  • George Dawes

    May as well just give them the deeds while you’re at it

  • Peter Lewis

    As the most likely reason for a Landlord to default on their mortgage payments would be unpaid rent from a tenant or setting the rent too low for the property, it just shows how ‘Ben Twomey’ of Generation Rent is completely out of touch with the real world when it comes to financial matters..

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    Another out of touch “ demand” 😂

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    Banks are such human, understanding organisations, of course they will want to become LLs with all the regulation that entails! Lloyds organising your gas safety? NW your EICR?

    Until the tenant groups actually understand the PRS they have no hope of contributing to solving the crisis.

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    Also while your at it could you get cleaners in as I am to busy attending demonstrations to find the time

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    Does this mean that Generation Rent now understands some of the financial pressures on Landlords ! Perhaps they could ask for a reduction in mortgage payments for LLs so that tenants are not evicted unnecessarily?

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    So Mr Ben Twomey CEO of Generation Rent knows something that I don’t.
    Since when did Lenders have the right to evict using Section 21 ?. So why have you been Campaigning to make landlords insolvent now you are complaining about the result of your actions.
    Its been a full scale attack by Shelter. Generation Rents and many others including Housing Secretary Michael Gove that has Created this situation so why are you moaning about what you have done, without your interference thousands of LL wouldn’t have sold up, making a bad situation much worse causing a shortage consequently forcing rents up. Since none of you house anyone including Shelter what gives you the right to interfere. We are Private landlords who supply the property off our own backs with our own finance housing millions and yet we are enemy No.1.
    Please can anyone tell one thing just one thing one thing the Government has done to help Private Landlords this last 15 years one thing Please.
    On the other hand what they have done to damage us the list is endless, did someone say there’s a Housing Crisis ??.

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    Exactly Simon A
    If the government can bail out energy company's why not support landlords.

    And anyway this is all caused by unnecessary interest rate rises which have no impact on supply side inflation.

  • George Dawes

    And now live from his mum’s basement , generation rant on how everyone else is rich and it ain’t fair

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    Tenants could offer to pay a higher rent to avoid repossession.

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    Lastly , let's go one step further Gen Rent, ask what protection Banks will give to tenants who won't pay their rent to allow them.to stay in a property at risk of being homeless.

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    Landlords don’t need bailing out just call off the wolves and reverse your Policies that was designed to destroy.

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    It’s amazing that the Housing Secretary Mr Michael Gove’s RENT REFORM BILL has done so much damage already even before its Law at all and still he proceeds with this Disaster Policy.
    How much evidence does he need even according to John Birds Big Issue who is no fan of landlords. There has been a massive rise of 2’228 home losses between April & June this year up 41% on the same period last year cause in no small way by THE RENERS REFORM BILL scrap it now enough is enough.
    Now he has the Cheek to be a keynote Speaker at NRLA meet in Birmingham in October bragging about he’s going to create a Strong Stable Private Rented Sector that he has Destroyed is he off his trolley.

  • Matthew Payne

    This is what happens when you appoint a teenager to contribute to serious debate, they think they are playing monopoly where its normal to negotiate with the banks for free stuff and everyone lives happliy ever after.

  • Peter Why Do I Bother

    I have an idea Twomey my old fruit, let us try this

    All the selective licensing money being raised by all councils is put into a pot, held by for example Shelter..!

    Any tenant that defaults from paying rent is then flagged and the landlord can approach Shelter for them to pay outstanding rent.

    The same when the tenant trashes the place, landlord again goes and proves they have damaged the property and get reimbursed for the repairs in a timely manner that the landlord can get the stock back on the rental market.

    The landlord for any of these issues can approach Shelter and get sound legal advice.

    This way it pivots the stupid idiotic activists from preventing rental properties to getting more properties back into use.

    Also they would be bankrupt within about three weeks....

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    No mention by them of section 24. That example of someone on a mortgage of 80% of the rent will be considered liable for tax on half that 80% thus probably losing money and paying tax for the privilege!

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    Exactly, they should be campaigning vigorously against all the anti-tenant legislation that they wanted in the first place. 80% mortgage equates to 107% of the rent if you factor in the section 24 tenant tax. So either the landlord sells up (exactly as intended by our political overlords) or goes bankrupt and is repossessed (GR and other landlord haters no longer rubbing their hands with glee now they finally realise the consequences of that). Or puts up the rent so that he/she can still cover the mortgage and essential maintenance and maybe get a return on their evil investment.

    On a more positive note I recently wrote to the MP where I own most of my property and pointed out the absurdity of Section 24 adding significantly to the rent charged to tenants. I was quite surprised to get a reply say that "you have raised some valid and interesting points on this matter", and promising to raise my concerns with the treasury and get back to me with any reply.

     
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    Seems to me the article is conflating two different things. No fault evictions and tennants who stop paying their rent.
    If tennants stop paying their rent, and get evicted, it's not a no fault eviction. Most tennants are evicted because they have stopped paying the required rent they contracted to pay the landlord, or because of antisocial behaviour. E.g. making their neighbours lives a miserable hell, such as playing loud music, barking dogs at all hours, parties, growing and or selling drugs, etc. etc.
    The tennants that damage your property are also likely to be unwanted as tenants.
    I have never evicted any of my tennants, as long as they pay their rent, and don't become a nuisance to their neighbours.
    In 24 years of renting, I have only ever had to evict one tennant, and that was for non-payment of rent, for 8 months in arrears. He refused to leave, so it took that long to get him out. He said that "paying the rent was not a priority of his." He never told me what was more important to him than paying the rent. His guarantor paid up in the end!
    It's for these types of tennants, that we need Section 21. Its removal will cause devastation to the already crippled PRS.
    The legal system is broken, and not fit for purpose, when dealing with PRS issues. The courts are not acting fairly, and
    local councils are just as bad, if not worse. I'm not optimistic over the next 10 years, due to seeing where things are heading already. What else can LL's do other than sell up, and invest in something more profitable?

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    The only way forward is to be utterly risk averse and not take any chances like in the olden days. Credit check, at least 3 months bank statements with rent consistently paid, referees, guarantors, rent up front.

    I've just rented a property to the sister of somebody that I know. She has a long track record of paying the rent and looking after her previous place, and it would come back to him if there were any problems. I think getting a rental property will increasingly be a case of who you know as much as anything else.

    Or you could just sell up.

     
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    I also have only ever evicted non payers, without sec 21 the only way will be the illegal way, and if that what it takes then so be it

     
  • Franklin I

    Don't worry about the LL's who've waited for a PO since November 2022, and received no rent, only for GenRen to be rewarded with the 'Tenant’s reform bill,' and now propose another piece of crap that will accelerate the extinction of PRS - LL's for good.

    I'm guessing that the news of increased interest rate on BTL mortgages hasn't been brought to their attention.

    In addition to other LL's expecting their PO hearing dates next month, being cancelled at short notice, because the government instructed the courts to do so.

    LL's still have to pay tax, inherit bad credit and get no support whatsoever.

    Keep coming up with these pathetic plans, as the more LL's that disappear, will only result in tenant's becoming homeless.
    GenRen will become surplus to all requirements!

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    In case anyone is interested, I came across this youtube video explaining how small private landlords have been targeted and why many are selling up. See:

    youtu [DOT] be/NtVk3ERt66w?si=P-9F7fT_FQD84bci

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    How times have changed, and not for the better! I remember in the 1990’s, I had a tenant who failed to pay rent for 3-4 months. He was full of promises which were nothing other than BS. As I always kept a key of my own, I entered the property, bagged all his belongings and had the locks changed. I left him a message to contact me when he wanted his belongings back. Things were so much easier then! 😂

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    Throw them out of an upstairs window, much better

     
  • George Dawes

    Remember Frankie Abbott from please Sir !

    This guy reminds me of him

    Rebel without a tie 😂

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    Why is every article misquoting the law.
    Using Section is seldom an Eviction.
    When you let a Property on an Assured Shorthold Tenancy that’s exactly what it is, can be from 6 months up to 7 years, at the end of the Term (unless extended by mutual agreement to periodic )the landlord is required to serve a Section 21 notice if the Tenants don’t honour the Contact.
    How can that be an Eviction it’s end of Contract Requirement.
    Stop calling it an Eviction you morons because it’s not.
    Assured Tenancies is what they seem to be going back to.
    So why did they convert virtually all the Assured Tenancies to Assured Shorthold in 1997.
    Now then why are they back tracking converting all Assured Shorthold Tenancies back to Assured Tenancies that they know didn’t work ????.

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    Spot on Michael!

     
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    Generation rant is ranting but cannot provide any real hep to the tenants, like provide free rental to tenants who do not pay the LLs. Gen Rant us living in a cuckoo world. Just like shopping market wish to be paid in advance, before you take their food etc home, the LLs need to be paid rent every month in advance. If they cannot pay they should leave on their own accord or with notice, whether S21 or just email or letter. There is no other alternative unless Generation can raise money to pay for their tenants, thy are fighting for, or refuse their own huge salaries to keep a few tenants in comfort. Gen Rant is a waste of space, as they have managed to be the cause of increasing rent and needs to be closed down. Shame on Nationwide, promoting and investing their LLs money into Gen Rant, while lending to LLs via their subsidiary, TMW. I got rid of one loan with them last year, another two will go this year and the last one, at the end of next year. LLs need to boycott TMW as soon as possible within next 3 to 4 years. LLs should stop borrowing from TMW, completely. They wish to make money from LLs and assist charities. We should be able to give notice to tenants if they do not pay rent, either S.21 or by letter or email.

    Franklin I

    GenRen should enter the PRS market.

     
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    Has Generation Rant ever thought to let the tenants know that if they cannot afford a place, the best thing is for them to crawl back home to their mummy and daddy, or uncle, aunt, brother or sister. The tenants should also need to be advised work or stay on the streets, and the council will provide as they have a liabilities towards the tenants who cannot pay, housing needs to be provided by the councils. Gen Rant needs to focus on telling the council and housing associations to take on the responsibilities to house the tenants and to not to bother PRS, as they do not understand PRS model at all. Twomey needs some education or get him off before he causes more trouble for the tenants. By the time he actually notices how bad the outcome is due to his ranting, he would have long gone retired with huge package.

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