Facing repossession can be an incredibly stressful and emotional time. However difficult your current financial situation may seem, know that you still have options and there are constructive steps you can take. Here, we bring you practical, realistic advice on actions that can potentially see you retain ownership of your home or navigate this sale process with greater ease.
What is repossession?
Repossession refers to the process by which a lender takes back an asset, such as a house or car, due to the borrower defaulting on loan payments or breaching the terms of their financing agreement.
When it comes to mortgages, repossession means the lender (usually a bank or building society) takes legal ownership of your home in order to recover unpaid mortgage debts. This is typically only done as a last resort after other collection methods have failed and the homeowner is considerably behind on payments with little ability to catch up on the repayment schedule.
The repossession process involves the mortgage lender applying to court, after which bailiffs can be directed to physically regain control of the property if payments are not resumed. It can be completed in as few as 28 days.
While daunting, even at the repossession stage, temporary solutions may still be negotiated or alternative housing arrangements made before vacating the property. Knowing your rights and options is key.
Is house repossession common in the UK?
House repossessions are not uncommon in the UK. According to reports, between 70 and 280 homes in England were repossessed monthly in 2022, and in Wales, this figure ranged between five and 25. The reasons for house repossessions in the UK can vary, but they often include job losses or large unexpected expenses.
How many mortgage payments can I miss before repossession?
There is no fixed number of missed mortgage payments that automatically triggers repossession. However, many lenders will initiate legal proceedings after two to three months of nonpayment. Typically, if you fall into significant arrears of over three months without establishing any repayment arrangements, your lender will apply for a court order.
But even then, repossession doesn’t instantly occur as numerous hearings usually follow to determine outcomes.
Our advice is that borrowers maintain open communication with mortgage providers as any consistent failure to pay can raise red flags – be honest about hardships and demonstrate willingness to address debts through modified plans or alternative options. Consulting advisors as early as possible is crucial.
How long does a property repossession take?
The timeline for repossessing a property can vary depending on individual circumstances. However, the typical process spans two to six months on average. Initially, one to two months involves the lender issuing notices of default and applying to court. Then it takes roughly two months for a judge to approve a possession order at a hearing before a final repossession date is eventually set.
If all criteria have been met, eviction by county court bailiffs usually follows one to two months later where any belongings are removed. So while threatening letters may come quickly, there are opportunities even post-court involvement to resume payments or meet terms that can still halt the loss of a home. Don’t wait to seek expert advice.
What happens if my house is repossessed?
Once a home is legally repossessed, the ownership transfers to the lender and they can take full control of the property. Typically, the mortgage provider will aim to sell the house in order to recoup as much of the outstanding loan amount as possible. They may first spend some funds improving or repairing the home to maximise the potential resale value.
The lender is within their rights to market and list the home with an estate agent and retain any profit from the sale, above what is owed on the mortgage. Understandably, this process can make the prospect of finding new suitable housing difficult for the previous owner now displaced.
Fortunately, some programs exist in some areas to help anyone impacted to get back on their feet. Consulting housing charities like Shelter, deferment options and public assistance schemes can help in navigating next steps.
The process of house repossession?
Losing your home to repossession is an extremely difficult situation. If you fall behind on mortgage payments, the lender can legally take ownership of the property. This unfolding process has several stages:
Missed payments
The first sign of distress is when consistent failure to make monthly payments occurs. Lenders may initially reach out to create payment plans.
Court order
If nonpayment continues, the mortgage company can begin the legal process by filing a court order requesting possession.
Court hearing
A hearing date will be set for the lender and borrower to each present their cases before a judge. This is an opportunity to explain mitigating circumstances or last attempts to get current on payments.
Possession order
If efforts remain unsuccessful, the judge typically approves the order, transferring ownership. An eviction date giving reasonable time to vacate the property is assigned.
Eviction
On the decided move-out date, court bailiffs have authority to remove occupants and their belongings if still on site. Mortgage providers can then initiate resale.
While distressing, mortgage advisors can assist those at risk better navigate the process before a repossession completion. Don’t hesitate to access all available support.
What are the potential outcomes of a court case?
Appearing before a judge for a repossession hearing can conclude in various ways. Most commonly, the judge either permits the lender to acquire the property by evicting occupants, or issues a suspended order which provisionally halts repossession while strict repayment terms are established.
Meeting these set conditions becomes essential to retain ownership. Alternatively, if the judge feels adequate evidence wasn’t presented initially, they may adjourn the case to a future date after requests for further information are satisfied by both parties. This postpones the final decision.
No matter the outcome, understanding the judge’s ruling and next steps is key. Consult a housing advisor or lawyer to ensure clarity on what each determination means for your situation.
Are there ways to avoid repossession?
Yes, even if you have received a court order, there may still be actions to take or alternatives to negotiate that could prevent losing your home.
Selling your property yourself before the lender assumes ownership may allow you to take profits from the property’s appreciation in value.
Your lender might postpone repossession proceedings if reasonable sale efforts are underway. You will need cooperation from your lender in order to sell the property.
FREE help is here
If you need help selling a property quickly before it’s repossessed, reach out to us asap before your lender has a possession order granted.
Our legal team will jump on the case to fight your corner for free. In addition, we’ll buy your property quickly for cash so you can pay your lender what they are owed, and get them off your back.
Lender not playing ball? Don’t worry. We’re skilled at negotiating with lenders and we can help you with that too.
We’re happy to go to court to speak to the judge and to demonstrate to the court that your property is being sold to us and that we can guarantee the lender they will soon have their money.
Selling your house to avoid repossession
If you face repossession, independently selling before your mortgage provider assumes ownership brings certain benefits along with drawbacks, depending on how you choose to sell it. Three main options exist:
Estate agent
You probably won’t have time to sell via an estate agent if your property is under threat of being repossessed. Estate agent sales can take between 3 – 6 months and any sale that goes ahead, can fall through if a buyer pulls out. In the case of repossession, you need a guaranteed sale.
Auction
Auctions cannot guarantee sales. Everything depends on the reserve price and how that sits with the bidders at the auction.
If a reserve price is too high, and the property doesn’t sell at auction, you’ve lost time and the lender has inched closer to taking your home and potentially leaving you homeless and without any money from the sale.
If you set a reserve price that’s too low, you could end up selling your property for a fraction of its true value. In the case of a repossession, you’ll need a guaranteed sale and a predictable price so that you can be sure that the sale proceeds will cover the remainder of the loan and any other lender’s fees, so you don’t wind up in debt after the sale.
Property Rescue
Property Rescue was created specifically to help rescue properties under threat of repossession. We facilitate a quick and reliable sale, often completing transactions in just a matter of just days. The speed allows you to avoid repossession. Additionally, our legal panel of top solicitors are on hand to help with the legal side of things. And the best part – you pay absolutely nothing for our help.
Why not get the ball rolling right away by requesting a free, no-obligation cash offer for your property now. If you’re happy to sell to us, we’ll do everything possible to help you do exactly that.