Tenants feeling sharp end of credit crunch as evictions soar

Published on Friday 16 October 2009 20:48

REPOSSESSIONS have been the target of the government initiatives, but it's not only homeowners that are getting kicked out of their properties.

More people are being evicted for rent arrears than having their homes repossessed, with a sharp jump over the past couple of years in the number of tenants being ejected by both private and social landlords.

At the end of 2008, social landlords were evicting twice as many people as were being repossessed for mortgage default, according to Shelter Scotland, the housing and homelessness charity.

Yet while various measures have been introduced to reduce repossessions, such as the Scottish Government's mortgage to shared equity scheme, less help has been targeted at those facing eviction from rented social or private housing.

Rising unemployment and pay cuts have piled the pressure on tenants struggling to make their rental payments, while landlords falling behind on mortgage payments and facing repossession have increasingly sought to evict tenants in rent arrears.

Housing agency Threshold recently revealed a marked rise in the number of tenants being illegally evicted from their homes by landlords and lenders. It has received more than 1,000 reports of threatened or actual illegal evictions already this year, compared with 684 in the whole of 2008.

In most cases, the evictions are being carried out by lenders, claimed John Blackwood, director of the Scottish Association of Landlords. "Lenders are going in heavy-handed. They are often unwilling to negotiate with landlords who are getting into difficulties and then tell the tenants that they are being evicted," he said.

As it stands, tenants whose landlord's property is repossessed do not have to vacate immediately. Under Section 11, which came into force in Scotland on 1 April, landlords and creditors have to notify the relevant local authority when raising proceedings for a possession or serving notices relating to a mortgage. That gives tenants who discover the property is being repossessed time to take advice from the likes of Shelter Scotland, Citizens Advice Scotland or a solicitor.

But with affordable buy-to-let loans in short supply, landlords coming to the end of their current mortgage deals could find it hard to maintain repayments when they move to more expensive deals, Blackwood warned. Consequently, more tenants could suffer the consequences.

"It is easier for lenders to evict tenants than it is for landlords, who have to prove tenants are over three months in arrears and then go through a court process that can take up to 12 months."

In many cases, according to Shelter, the mortgage lender will agree a leaving date with the tenant to give them a chance to find an alternative.

Where no agreement is reached, lenders seeking to evict tenants have to follow specific procedures that can drag out for several months.

The growing problem is not limited to the private sector. In 2007-8, almost 3,600 tenants in Scotland were evicted by councils, registered social landlords and housing associations, the vast majority for rental arrears. In fact, social landlords are twice as likely to obtain a decree of eviction against their tenants than lenders are for private homeowners, according to Shelter Scotland.

Graeme Brown, director of the charity, called on the Scottish Government to replicate the work being done to tackle repossessions by doing more to curb evictions by social landlords.

"Stirling Council was recently the first council in the UK to ban evictions for rent arrears and we are working closely with the council to implement this policy. In addition, Glasgow Housing Association has made moves to reduce evictions from social tenancies," said Brown.

He pointed out that evicted tenants remain the responsibility of the council.

"While we recognise the need to have some way to claw back debts, is turfing out a family for 300 debt – only to have them appear at the homeless officer's door – really the best course of action? There are alternatives to eviction."

If you are in housing association or council accommodation, your rights partly depend on the kind of tenancy agreement you have (a Scottish secure tenancy or a short Scottish secure tenancy, for instance). Landlords have a strict process to follow if they want to evict tenants, which includes getting a decree for eviction from the sheriff.

Whatever you do, don't bury your head in the sand, said Brown. "Seeking advice early is the key to avoiding a crisis if you are facing housing problems or struggling to pay your mortgage or rent."

&#149 Further information: www. scotland.shelter.org.uk / 0808 800 4444. Citizens Advice Scotland, www.cas.org.uk

HOW TO ADDRESS RENT ARREARS

Don't ignore it: Keep any letters from your landlord and lender and seek advice. Speak to an adviser at Citizens Advice Scotland (visit www.cas.org.uk or your local bureau), a money advice centre (0141 572 0237 or www.moneyadvice scotland.org.uk) or contact Shelter.

&#149 Put your rent first: The roof over your head is your priority, so make sure you pay your rent before other debts.

&#149 Check your benefits: Are you claiming all of the benefits to which you're entitled, such as housing benefit? This can help cover your rent and can be backdated if it hasn't been claimed. If you do already receive the benefit you can ask for a discretionary payment to cover rent shortfalls.

&#149 Budget: Look at your income and outgoings so you can identify any potential savings that could help you get rent payments back on track. Look at your bills in particular, as costs can be cut by shopping around.

&#149 Talk to your landlord: Explain your situation and explain how you plan to repay any rent shortfall. A landlord who knows that you are willing to pay what you can may be more understanding than if you have avoided telling them.

&#149 For more information visit www.scotland.shelter.org.uk / or call 0808 800 4444