Unaffordable Mortgage Leads To Intentional Homelessness

A council tenant who decided to buy a house but could not then keep up the repayments on the mortgage, leading in turn to the house being repossessed, was found to have made herself intentionally homeless.

Mrs Watchman had a history of rent arrears when she and her husband purchased the property. The mortgage payments were significantly higher than the amount they had paid in rent. Some time later, Mr Watchman lost his job and mortgage arrears began to accumulate. The mortgage lender was granted a possession order and Mrs Watchman applied to Ipswich Borough Council for council accommodation.

The Council refused her request on the grounds that she had made herself intentionally homeless. The Council concluded that her husband’s loss of employment was not part of the chain of causation because it was inevitable that they would have got into severe financial difficulties. Mrs Watchman appealed against this decision, arguing that at the date she left the council accommodation, her future homelessness was not inevitable and that it was her husband’s loss of employment that led to her plight.

The Court of Appeal ruled that the Council’s decision was well-founded. The reviewing officer had been correct to take the couple’s past history into account and to consider what would have happened had Mr Watchman remained in employment. His loss of job accelerated their homelessness, but it was reasonable to consider that it was inevitable in any event.

“This case follows the logic applied in another recent case in which a tenant who moved out of her council accommodation into more expensive private rented accommodation that was beyond her means was also considered to have made herself intentionally homeless,” says Syed Talha Rafique(srafique@duncanlewis.com). “It follows that tenants considering such a move should do their budgets very carefully indeed and be able to show that their decision was financially viable at the time it was made should the worst come to the worst.”



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