Struggling homeowners hit by the pandemic are being evicted by banks in court hearings lasting just nine minutes — often with no legal representation.

Money Mail and The Bureau Of Investigative Journalism discovered that many homeowners have lost their homes. 

One was issued with court orders advising them that they were one payment away from eviction. The other was pursued for a few hundred pounds in arrears.

Evictions up: Repossession claims by banks have surged by 50%, rising from 750 in May to 1,160 in June, according to Office for National Statistics data

Evictions are up: Bank repossession claims have risen by 50%, from 750 in May, to 1,160 in June according to data from the Office for National Statistics.

Experts warn that families could be left homeless this winter due to a rising cost of living and higher interest rates.

At the start of the Covid crisis, the Government insisted ‘nobody should lose their home as a result of the pandemic’.

Nearly three million mortgage customers were granted mortgage payment holidays. Repossessions were also banned between March 2020 – April 2021. Except in emergency cases, the ban on bailiff-led expulsions was extended to the end of May in England.

According to data from the Ministry of Justice, repossession claims from banks have increased by 50%, from 750 in May, to 1,160 in June. A claim is when a lender files for a possession or other legal order to evict a homeowner.

It means repossessions are already back to 58 per cent of levels seen before the pandemic — despite courts still operating at reduced capacity owing to Covid.

Richard Harrison, a senior adviser for Homeowner Management Services, says: ‘A lot of the people are homeowners who were in financial difficulty before the pandemic. 

We expect to see those whose circumstances have changed overnight during lockdown through the courts in the next six to twelve months. This is the tip of the iceberg.’

Reporters sat in on 115 mortgage cases at 30 courts across England and Wales over two months and found ‘Covid’ was mentioned in one in three hearings.

A taxi driver was one of the homeowners who saw his job disappear during the pandemic. In one eight-hour shift he earned just £17.

Another was a business owner who said they had ‘never been in such a difficult position’. One mother wept openly after a judge ruled that Covid had caused her work to stop, and that the bank could take her home. 

Two victims claimed that they felt suicidal after the incident. Nearly half of all cases ended in possession orders, which allowed the lender to immediately evict homeowners.

On average homeowners were £7,900 in arrears. But one was pursued for arrears amounting to only £670. In 81% of hearings, the homeowner did not have legal representation.

Harsh times: As families face a cost-of-living crisis, with interest rates expected to rise and energy bills soaring, experts warn many more could end up homeless

Harsh times: With interest rates rising and energy bills skyrocketing, experts warn that families could be facing a crisis in their ability to pay their bills. 

The proceedings can be hidden in secrecy with reporters seeing lawyers representing mortgage lenders and asking them to be excluded. 

Money Mail has also seen a letter sent by banking trade body UK Finance to top justice officials raising concerns about our report, claiming ‘media attention on possessions causes nervousness amongst mortgage lenders given the reputational risks’.

A spokesman denied seeking to exclude journalists from courts, adding: ‘All the communication we had with either The Bureau Of Investigative Journalism or the courts was solely to seek clarification on the nature of the work.’

Shadow Housing Secretary Lucy Powell says: ‘The safety net for homeowners was withdrawn, and we’re starting to see the result.’

Combined with thousands of renters already facing eviction, the UK was possibly facing a ‘homelessness crisis this winter’, she adds.

If a homeowner defaults on their mortgage payments, or reaches the end of an interest only agreement and is unable to pay the debt, they could face legal action. 

But under Financial Conduct Authority (FCA) rules lenders must not repossess a home unless ‘all reasonable attempts to resolve the situation have failed’.

There are alternatives to repossession. You can defer interest payments, extend the mortgage term, or add arrears on top of the total debt. 

Lenders must give homeowners enough time to sell their house before repossession, even if they can’t agree on a repayment agreement. The Financial Ombudsman may be contacted if homeowners feel that there are violations of the rules. 

If there is no solution, the homeowner can be taken to possession court. They will have an opportunity to explain their situation before a judge.

Additional support is available for homeowners in Scotland who are at risk of losing their homes. Its mortgage-to-shared equity scheme allows the Scottish Government, to purchase a stake up to 30% in a property for borrowers to reduce their loan and retain some ownership.

Of the hearings attended by reporters, Lloyds Bank and the Bank of Scotland — both part of the Lloyds Banking Group — customers accounted for 38 per cent of cases in ten of the busiest courts — despite the two lenders making up just 20 per cent of the total mortgage market.

A Lloyds Banking Group spokesman says: ‘We will do everything we reasonably can to support [customers] and only after we’ve exhausted all other options would we seek a possession order. 

We strongly believe that repossession should only be considered as a last resort. For every 100 customers who face difficulty, over 99 remain in their homes.’

A spokesperson said that customers were only brought to court when payments were 14 months behind. He also stated that 70% of borrowers who were taken to court were in arrears prior to the pandemic.

An FCA spokesman says: ‘Repossession should be a last resort and we require lenders to provide appropriate tailored forbearance including allowing people a reasonable time to repay any shortfall.’

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