Kensington Mortgage Company v Price: mortgagee in possession must register as Welsh landlord before serving possession notice

The High Court has ruled that a mortgage lender which goes into possession of a property subject to an occupation contract in Wales must register and obtain a licence under the Housing (Wales) Act 2014 before it can lawfully serve notice to terminate that contract, dismissing the lender's attempt to hold landlord status under one piece of Welsh legislation while avoiding it under another.

In Kensington Mortgage Company Limited v Mark Price and others [2026] EWHC 1577 (Ch), His Honour Judge Keyser KC, sitting as a Judge of the High Court at Cardiff, resolved for the first time the intersection between the Housing (Wales) Act 2014 and the Renting Homes (Wales) Act 2016 as they apply to mortgage lenders holding security over tenanted residential property.

Kensington Mortgage Company, a specialist buy-to-let lender, held a registered charge over a leasehold flat in Llanelli. The borrowers fell into arrears in 2022 and a possession order was obtained against them. The lender was unaware that the property had been sub-let, and the warrant of eviction was withdrawn when Shelter Cymru contacted the lender on behalf of the occupiers. A subsequent notice under section 8 of the Housing Act 1988 was abandoned as invalid following the commencement of the 2016 Act on 1 December 2022.

The lender, which is neither registered nor licensed under Part 1 of the 2014 Act, sought declarations aimed at enabling it to recover possession. It wished to be treated as a landlord under section 244 of the 2016 Act, so as to be able to serve a notice terminating the occupation contract under section 173, while simultaneously arguing that it fell outside the definition of "landlord" in section 2 of the 2014 Act, thereby avoiding the registration and licensing regime altogether. Shelter Cymru intervened, appearing pro bono, and contested that construction.

HHJ Keyser KC rejected the claimant's attempt to drive a wedge between the two Acts. He held that a mortgagee which becomes mortgagee in possession of a property let under an occupation contract that is binding on it becomes the landlord for the purposes of both the 2016 Act and the 2014 Act simultaneously. As the immediate landlord of the contract-holder, a mortgagee in possession falls squarely within section 2 of the 2014 Act and is therefore subject to the same registration and licensing requirements as any other private landlord.

The judge also provided significant practical guidance on what constitutes becoming a mortgagee in possession in respect of a tenanted property. Obtaining a possession order against the mortgagor is not sufficient. Nor is serving an invalid notice on the occupiers. Where a tenancy is binding on the mortgagee, it goes into possession by directing the tenant to pay rent directly to it rather than to the mortgagor, thereby assuming control and management of the property, following the principles in Noyes v Pollock (1886) 32 Ch D 53.

On the facts, the court found that the claimant had not become mortgagee in possession at all. It had never directed the occupiers to pay rent to it. Accordingly, it was not yet entitled to serve a section 173 notice under the 2016 Act, regardless of registration.

HHJ Keyser KC also held that the 28-day grace periods in sections 5 and 8 of the 2014 Act, which apply where a landlord's interest is "assigned", do not extend to mortgagees in possession. A mortgagee takes possession as an incident of its rights under the mortgage; no assignment of the landlord's interest takes place.

A challenge under Article 1 of the First Protocol to the European Convention on Human Rights was dismissed. The judge observed that a mortgagee which chooses to go into possession of a tenanted property assumes the rights and liabilities of a landlord under the general law. There was no proper basis for saying the registration requirements, which are accepted as lawful for all other domestic landlords, constituted an unlawful interference with a commercial lender's property rights in those circumstances.

The judge left open the question of whether section 44 of the 2014 Act, which bars the giving of a landlord's notice where registration is absent, applies to landlords that are expressly exempted from the registration requirements entirely, such as community landlords. He indicated, however, that to avoid absurdity, the prohibition would likely fall to be read subject to those exemptions.

The case is of direct relevance to lenders operating across Wales's private rented sector. The judgement noted that no major bank, mortgage company or registered social landlord is presently registered on the public register maintained under the 2014 Act.

Owain Rhys James (instructed by Moore Barlow LLP) appeared for the claimant. Lucy King, Dylan Jenkins and Zack Hayward (instructed by Shelter Cymru) appeared pro bono for the intervenor.