Posted 23rd June 2009

In the current economical downturn there is increasing evidence of private tenants being placed at risk of losing their homes in the UK. Mortgage repayment difficulties are affecting an increasing number of property owners, many of whom are threatened with the grim prospect of repossession, but when buy-to-let landlords fail to keep up their loan repayments, it means that the private tenant is the unfortunate party facing possible homelessness.

It is often the case that the last person to know about their landlord's financial predicament is the tenant, when the first suggestion that the house or flat they live in is about to be repossessed is when the bailiffs come knocking on the door. Unscrupulous landlords may be difficult to detect by those looking for a home to rent, and even though the Government are keen to introduce legislation specifically to protect private tenants in buy-to-let properties, there is already a law to deal with such issues as long as tenants abide by the terms of their tenancy agreement.

Under the Law of Property Act 1925, the mortgage or loan provider can appoint a receiver of rents to take over from the landlord - or borrower - should they fail to keep up repayments on buy-to-let properties so that it is then the lender's responsibility to instigate repossession if necessary. This, however, is less likely to happen to property that has been purchased with specific buy-to-let home loans, as mortgage companies consider it far more prudent to keep rent money coming in from a private tenant, even if it simply covers the interest on the loan.

The difficulty may then come in finding a house or flat to rent that is "owned" by a conscientious landlord to prevent the possibility of eviction of private tenants whilst they are still paying rent and satisfying all aspects of their rental agreement. As this disastrous situation could also incur problems in re-couping deposit payments regardless of who actually has been receiving the rent, advice for private tenants should be sought before moving into rented property to gain a level of reassurance as far as is possible.

Please Note! YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. ALL SECURED OR UNSECURED LOANS ARE SUBJECT TO STATUS. SECURED LOANS ARE SECURED ON PROPERTY.

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