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Mortgage Repossession Protocol Changing Behaviour

It seems that the new mortgage repossession pre-action protocol (which we talked about here) is having an effect on mortgagee’s behaviour with a dramatic drop in repossession actions.

Whether the protocol has been responsible for this or whether mortgagees are less inclined to take possession due to the difficulty in recovering their investment by selling the property is a moot point. The key issue from the point of view of the landlord and tenant professional is the increased willingness of mortgagees to appoint receivers and reach sensible commercial arrangements.

From the tenant’s point of view this means that they may be able to remain in a property they have rented by paying rent to a receiver appointed by the mortgagee. However, it should be remembered that the receiver is frequently not accepting the landlord’s responsibilities (just the money!) and so it will still be necessary to look to the landlord to repair the property.

For buy-to-let landlords the new willingness of mortgagees to reach sensible commercial arrangements coupled with a reduction in interest rates may be sufficient to allow them to weather the downturn. However, it is notable that many mortgagees are refusing to remortgage with buy-to-let landlords so this may not be sufficient.

Whether this new attitude from mortgagees will continue when they can more easily sell property remains to be seen but the current change in attitude will benefit landlords who make an effort to negotiate with their mortgagee if things are difficult.

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