Home repossessions set to be put on hold until April
Calls to extend the ban on home repossessions come after a third national lockdown was introduced earlier this month.
Home repossessions are set to be put on hold until April following the introduction of new lockdown measures across the UK.
Regulator the Financial Conduct Authority (FCA) has proposed lenders should not act on repossession orders and take back people’s homes until at least 1 April.
The moratorium on repossessions would apply to both homeowners and landlords of buy-to-let properties.
While the proposal has been put out to consultation until 18 January, it has already received the support of trade body UK Finance, which represents mortgage lenders.
Eric Leenders, managing director of personal finance at UK Finance, said: “The banking and finance industry is committed to providing ongoing support to those facing financial difficulty as a result of the pandemic.
“The industry is fully supportive of a moratorium on possessions remaining in place until 1 April 2021 to ensure customers do not lose their home at this difficult time.”
Why is this happening?
The FCA had previously called for lenders not to enforce repossession orders before 31 January, except in exceptional circumstances.
It is proposing extending this guidance until 1 April due to the worsening coronavirus situation in the UK and the government’s new lockdown measures.
It said the latter meant people could experience significant harm if they were forced to move because their home was repossessed.
What support is available?
Mortgage lenders have introduced a range of support measures to help homeowners and landlords whose finances have been impacted by the pandemic.
The option of taking a mortgage payment holiday, under which people can defer making their monthly repayments for up to six months, has been extended until 31 July, although consumers will have to apply by 31 January if they want a full six-month deferral.
For borrowers who have already taken a six-month payment holiday, lenders are offering tailored support, including accepting reduced payments for a period of time, switching them to an interest-only mortgage or extending their mortgage term.
More than 2.7 million mortgage payment holidays have been arranged since the scheme was first launched last March, with around 127,000 deferrals in place in mid-November 2020.
What should I do if I can’t pay my mortgage?
If you are struggling to keep up with your mortgage payments it is important to contact your lender as soon as possible, as you will have fewer options if you are already in arrears.
If you want to take out a mortgage payment holiday, follow the instructions on your lender’s website, as many lenders have set up an online application process.
If you want to request a different option, such as switching to an interest-only mortgage, you should contact your lender directly.
What’s the background?
The proposal to put repossessions on hold until April follows a similar move to ban tenant evictions until at least 21 February 2021 in England, and 31 March in Scotland and Wales.
The only exception to the ban is for evictions due to anti-social behaviour, illegal occupation, fraud or rent arrears.
Landlords are also required to give their tenants a six-month notice period if they want to evict them until at least 31 March.
Top three takeaways
- Repossessions are set to be put on hold until April following the introduction of new lockdown measures across the UK
- While the proposal from the FCA has been put out to consultation until 18 January, it has already received the support of trade body UK Finance
- The moratorium on repossessions would apply to both homeowners and landlords of buy-to-let properties
Lockdown 2021: ban on tenant evictions extended until February
The government has extended the ban on bailiff evictions for a further six weeks.
Tenants in England are being protected from eviction for at least a further six weeks.
The government is extending the ban on bailiff evictions for all but the most extreme cases until at least 21 February 2021.
The only exception to the ban is for evictions due to anti-social behaviour, illegal occupation, fraud or rent arrears of more than six months, as well as cases of domestic abuse in the social sector.
Communities secretary Robert Jenrick said the measures would be kept under review, and landlords would be required to give a six-month notice period to tenants until at least 31 March.
A pilot scheme is also being launched in February to offer mediation between landlords and tenants facing court proceedings for eviction to try to help the two parties reach a mutual agreement that keeps people in their homes.
What’s the background?
The government first introduced a ban on tenant evictions in England in March last year. Court eviction hearings were also put on hold.
The ban ended in September, but a new grace period was introduced between 11 December and 11 January in England and Wales to ensure no-one was evicted during the festive period.
Evictions were 86% lower between July and September 2020 than they had been in the same period of the previous year, while no repossessions were recorded between April and the end of September, down from 14,847 a year earlier.
Who does the new agreement affect?
England
Under the latest extension of the ban, tenants in England cannot be evicted until after 21 February, although the government said in reality, it did not expect any evictions until 8 March at the earliest.
Landlords will also have to give their tenants at least six months’ notice if they are being evicted before 31 March.
Wales
Tenants in Wales have been given even more breathing space, with the ban on evictions extended until the end of March.
Evictions will still go ahead, however, in cases of anti-social behaviour or domestic violence.
Scotland
The latest ban on evictions does not impact tenants in Scotland as they are already protected under separate legislation.
In September, Nicola Sturgeon’s government extended its coronavirus-related eviction ban until March 2021.
What are my rights as a tenant?
It is illegal for a landlord to evict you without giving you written notice or obtaining a court order.
If you are in an assured shorthold tenancy, the most common type of tenancy, they can start the eviction procedure through giving you either a section 21 or section 8 notice.
Your landlord does not need to give a reason to evict you under a section 21 notice, but they must give you a warning period, which is currently of six months, and you cannot be issued with a section 21 notice during the first four months of your original contract.
If you do not leave the property at the end of this period, your landlord must go to court to evict you legally.
Landlords can only issue a section 8 notice if they have legal grounds to end your tenancy, for example if you are in rent arrears. They must apply to a court for a possession order to evict you.
A landlord is not allowed to harass you or lock you out of your home, even temporarily, while they are waiting to evict you.
For more on your rights as a renter, read our guide here.
What should I do if I can’t pay my rent?
If you are struggling to pay your rent, it is important to talk to your landlord as soon as possible.
If you can still afford to pay some of your rent, ask your landlord if they would accept a reduced payment for a period of time, particularly if you think you will be able to make up the shortfall once your finances have recovered.
It is also be worth checking to see if there are any government benefits available to you.
The government has made £180m available for Discretionary Housing Payments which councils can distribute to support renters who need help with their housing costs.
Top three takeaways
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Tenants in England will be protected from eviction for at least a further six weeks
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Similar measures have been announced in Scotland and Wales
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People struggling to pay their rent are advised to talk to their landlord as soon as possible and check whether they are eligible for any benefits