Criticism over changes to some buy-to-let mortgages

[dutchman]

Coventry’s cabinet member for housing has hit out at the country’s leading buy-to-let mortgage provider for refusing to lend to new customers with tenants receiving housing benefits.

Councillor Ed Ruane believes the policy is not thought through as many landlords may inadvertently fall foul of the condition if a tenant originally in work loses their job.

It could then potentially lead to a double-whammy for the tenant, losing their job and then losing their home if they need to claim benefits.

There is more private rented housing in Coventry than social housing meaning the private rented sector plays an important role in meeting the city's housing needs.

Coventry City Council, which administers Housing Benefit in the city, has recently set up an Access to Private Rented Properties (APRP) team to place people and families looking for accommodation in housing in the private sector.

But Mortgage Works, Nationwide's buy-to-let lending subsidiary which provides mortgages for over a third of the buy-to-let market, has taken the decision to stop lending to new landlord customers with Local Housing Allowance (LHA) tenants.

Cllr Ruane believes the move is a backward step as tenants receiving housing allowances provide the same potential for regular income as someone in employment.

He said: "Coventry is like many cities across the country that needs more affordable housing and private landlords are can increasingly help to meet the need and let to people on housing benefit.

"However, if mortgage companies start to refuse to lend to landlords with tenants on benefits then it means it is only really an option if the landlord owns the property outright.

"It also means tenants in work who then lose their job and then have to claim housing benefit mid tenancy could face eviction as technically the landlord would breaking the terms of the mortgage through no fault of their own.

"Therefore it is essential that mortgage providers look to lend to landlords of all tenants, irrespective of where they derive their income."

Anyone wanting to access or find out more information about Coventry City Council's Access to Private Rented Properties (APRP) scheme should visit http://www.coventry.gov.uk/housing, email aprp@coventry.gov.uk or telephone 024 7683 1919.