Lenders have a “moral obligation” to keep tenants in their homes as more landlords face repossession for arrears, according to the chief executive of Generation Rent.

Ben Twomey has penned an open letter to the chief executives of four providers urging them not to evict tenants from the homes of landlords who have defaulted on their mortgage payments.

With repossessions of landlords expected to increase in the months ahead, Twomey says lenders are easily able to evict the tenants of their properties.

The agreement between the Treasury and lenders on support for mortgage holders doesn’t cover the buy-to-let (BTL) market, where borrowers tend to already be on interest-only mortgages.

According to UK Finance, lenders repossessed 440 BTL properties in the second quarter of 2023, while another 2,000 landlords are more than 10% behind on their balance.

UK Finance figures indicate that there are approximately 2m buy-to-let mortgages in the UK.

It says the sharp rise in interest rates has put many landlords under significant financial pressure, with the Bank of England estimating that by the end of 2025, 40% of those mortgages could incur mortgage payments worth more than 80% of the rent being received.

With no wiggle room, Twomey says it is likely that landlords behind on mortgage payments are at a higher risk of repossession and ‘there is nothing their tenants can do about it’.

He adds: “Eviction resulting from the actions of someone else is a very disruptive act with often severe consequences for the tenant that should be avoided wherever possible.”

The letter calls on mortgage providers to meet with Generation Rent and discuss which measures they can put in place to protect tenants.