Law change warning for landlords

News Category: Legal

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Buy to let landlords have been warned of a new law which could see lenders repossess their properties significantly quicker than before.

Under the term of the law, which was contained in the Tribunals, Courts and Enforcement Act 2007 but which has not yet been enforced, lenders will be able to secure a charging order against debtors more easily.

Once this order is obtained, the lender is then able to force a landlord or homeowner to sell up in order to repay their debt, the Observer reports.

The amendment comes at a time when higher repayments on buy to let mortgages and a surge in the stock of rental property available are believed to be squeezing landlords' margins.

Alex McDermott, policy officer at Citizens Advice, said: "There is likely to be a big increase in orders for sale if this change in the law comes into force, because once a charging order is in place, a lender isfree to apply for an order for sale as soon as someone falls behind with payments on the loan secured against their home."

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