Lenders can seize buy-to-let properties without court orders

Buy-to-let investors could face having their properties seized without a court order if they struggle with their mortgage payments, the Council of Mortgage Lenders has warned.

Myra Butterworth, Personal Finance Correspondent, The Telegraph - 19 Nov 08

A spokesman for the CML said lenders could “step into a landlord’s shoes”. Banks could either receive rent from the tenant for a fixed period of time or even repossess the property.

She said: “It would not be a bad thing as it would mean tenants would be protected if they are paying their rent but their landlord is not paying their mortgage.”

Estate agents have reported a flood of properties coming onto the rental market and rental prices falling for the first time since April 2003, according to the Royal Institution of Chartered Surveyors.

It comes as banks reveal they are increasing the number of staff to deal with calls from distressed home owners who are unable to pay their mortgages.

Speaking at a Treasury select committee hearing, executive chairman of Bradford & Bingley Richard Pym said its arrears department will swell from 200 employees in August this year to a peak of 400 next year. Northern Rock is also increasing arrears staff. Full Article