Tenants living in properties at what was a prestige development overlooking the Thames close to Canary Wharf in London say their residential landlords should cut rental charges because the majority of the flats have been left empty after being repossessed.
The 76 two-bedroomed flats originally sold for around £250,000 and another eight penthouses went for £400,000. The properties have now been valued at between £115,000 and £140,000.
The empty properties, which are part of the Pinnacles development in Thamesmead, have attracted squatters and rat infestations. There have also been anti social behaviour issues and walls have been daubed with graffiti.
The gardens surrounding the buildings and general maintenance of the property is in a poor condition because there are now not enough residents to pay service charges.
Some of the repossessed flats still have tenants living in them, but they say the rents of between £800 and £900 a month should be reduced to reflect the deteriorating conditions around them.
Gallions, a local Housing Association, has bought 22 of the repossessed flats which it rents out to council tenants for just over £350 a month.
The Council of Mortgage Lenders (CML) believes recent media coverage of repossessions in general, and at Northern Rock in particular, could have the effect of creating a misleading impression.
A CML statement released recently said: “There has been inadvertent media confusion between the flow of properties being taken into possession, and the stock of properties in possession, when comparing Northern Rock’s figures with the wider market.
“Overall, the CML continues to expect a total of around 45,000 properties being taken into possession this year. Out of 11.7 million mortgages, this remains a very modest repossession rate of around 0.38 percent.
Over 98 percent of borrowers continue to pay their mortgages in full and on time, and where arrears occur these are usually because of changes in the household’s circumstances (eg: unemployment or other loss of income).
“All lenders of all types are bound by the FSA rules on arrears management and repossessions (set out in the section 13 of the FSA’s Mortgage Conduct of Business Rules – MCOB 13). There is no logical rationale for a difference in approach for different lenders based purely on their ownership structure. This does not mean that the same policy should apply in every case – each borrower’s circumstances are different, and their prospects may differ markedly. But all lenders should be making best efforts to avoid repossession except as a last resort, as required by FSA rules. “Borrowers gain significant protection too from the court process, as well as from the Financial Ombudsman Service.
“Lenders and the CML support the mortgage rescue scheme currently being developed for implementation through local authorities and housing associations to help some targeted households to stay in their homes on a shared equity or rental basis.
