What happens when a house is repossessed & How to stop it from happening

Facing the possibility of repossession of home? The fear of losing your home can be overwhelming. Fortunately, there are steps you can take to prevent it.

Owning a home comes with its pros and cons, particularly during financial hardships. The repossession of homes occurs when mortgage payments are consistently missed.

Normally, a minimum of three months of missed payments is required before a bank or mortgage lender can begin repossession proceedings and record it on your credit history. Legally, the lender can then sell the repossessed home at an appropriate price to ensure a smooth process for everyone involved.

If you are concerned about the repossession of home process, this guide delves into what happens when a house is repossessed, how you can stop it from happening, and how you can avoid losing your home.

Here is a brief summary of the article so you know what to expect:

• Mortgage lenders usually prefer not repossess homes, but it’s important to maintain open and honest communication with them from the beginning.

• Repossession usually starts after three months of mortgage arrears, but effective communication can extend this period to 5 to 12 months.

• Selling your home can be a great solution to settle your mortgage arrears before house repossession completes.

What happens when a house is repossessed?

Owning a home means adhering to your original mortgage terms when you signed the dotted line, paying a specific amount every month. If this is not met, you may face the repossession of home. 

House repossession is a last resort, mortgage lenders are usually quite reluctant to do it as it costs them time and resources to take the property and sell it themselves, they would much rather you pay your mortgages and keep up with payments.

If you let your mortgage lender know you’re struggling, as soon as you possibly can they should be able to assist you in putting steps in place to get you back on track.

Communication is key when it comes to keeping your home. Don’t ignore your lender. They will help you as long as they know the facts and this is by far the best way to stop house repossessions.

Trying to pretend that your financial situation isn’t as bad as it is could result in legal action and you be subject to a repossession of home. 

With house repossession, it only takes one missed payment to put you in arrears (late payments) and at risk towards the repossession route, but most lenders allow you to explain. 

Generally, it’s 90-180 days in arrears before your home is at risk, and the mortgage lender has the legal right to repossess your home. Essentially, you’ve failed to honour your side of the agreement, and before they repossess, the lender has to get a judge to grant an ‘order for repossession’. 

Here is the process of repossessing a house:

1. Notice of Default, or missed payments  

Your mortgage lender will contact you regarding the arrears under a Notice of Default, but you don’t need to wait until they reach you. If you're worried about missing a payment, you can contact them and explain your situation.

By speaking to your lender, they can help you navigate the concern and consider other options for repaying, such as refinance, to help reduce the impact of repossession. 

2. Notice of Possession

If you can’t agree to a repayment plan, this is when the lender may start court action to repossess your home, and it is generally a last resort. The lender should provide the list of arrears and how much mortgage debt before they can take it to court.  

3. The court order   

Once the lender has taken the case to court, they’ll send you letters of the court order where you’ll need to attend a hearing about the possession order they will make. The two types of possession orders are an outright order and a suspended order. 

An outright order is severe, giving you a date to leave your home and could be as soon as they wish, such as a few weeks after the hearing. A suspended order allows you to stay in your home as long as you stick to the court’s terms. For example, there may be additional fees to pay a month. 

However, the repossession action of the lender isn’t always considered and may get dismissed during the court’s hearing, depending on the case. 

4. Repossession of home

If a court order goes ahead, the lender will have permission to send bailiffs to the house, evict you and take possession of the home. Bailiffs take control of the property, changing the locks, cancelling utilities and maintaining the place, ensuring it's secure. 

They’re not liable to damage the property, only to secure its safety. However, in some cases, they may have to force themselves into the home to repossess. They also remove the borrower and all of the belongings on the property. 

The bailiffs are allowed to repossess with an outright order or if those living in the home have broken the terms of the suspended order. 

The repossession works slightly differently if tenants live in a mortgaged property where the owners haven’t been paying the mortgage. During the repossession of home, the lender must choose someone to manage the property, and tenants can remain there under the original contract terms. 

Instead of paying the landlord, it’ll go to the new party managing the property. If the lender needs to evict the tenant, a separate repossession will begin against the tenant to sell. Again, this will need to go through a court order.  

5. Selling the property 

Many lenders will sell the property to get their money back during home repossession. The costs involved, such as solicitor fees and estate agents, use the selling money, but any spare goes to the borrower. Lenders often sell the property at an auction or through an estate agent, whatever will help with the best price. 

If the borrower thinks the repossessed property sells for an undervalued amount and the lender fails to get the best price, you can start a case for damages. The damages mean the difference in price between the selling and property value. 

The same goes for costs incurred in the process of repossessing a house, such as estate agent fees. You have six years to state this failure and take legal action against the lender.  

What happens if there is negative equity during repossession?

In some instances, when the repossessed property sells, the price doesn't cover the outstanding mortgage and the fees, leaving a debt for the borrower to pay. The borrower is liable to cover the shortfall and has up to 12 years to pay it before the lender can take action.

The lender even has the option to bring the borrower back to court to claim the money if the borrower doesn’t pay the difference back to them. 

How many missed payments before a house repossession?

Contrary to what you might think, mortgage companies generally prefer not to carry out repossession of homes. They are more inclined towards having borrowers repay their mortgages.

The number of missed payments leading to action varies with each lender, but usually, action is initiated after three missed payments. However, some lenders may delay this process if you communicate your situation transparently.

Effectively preventing or delaying house repossession largely depends on your communication with the mortgage company. Being forthright about your financial situation and actively seeking solutions to manage your debts is key. 

For a more detailed understanding of how many payments might lead to repossession, check our repossession of home guides below:

How long does it take to have your house repossessed?

As we've mentioned above, lenders will typically take action after about three months of missing payments, but how long will it take before you actually lose your home?

There's a lot of red tape for the lender to jump through before they can repossess your home but the truth is it depends on a variety of factors.

The amount of time it takes to be repossessed will depend on the courts calendar and how fast it goes through, whether your lender has done everything to the letter of the law and your communication with your lender.

If you communicate and are clear with your lender it will buy you more time and help you, it can take anywhere from between 5 and 12 months, which is the time in which you should look into selling your house to stop house repossession, but once a court order is made that you have to move out you'll typically have between 28 and 56 days.

How to stop repossession of home

If you’re struggling to make your mortgage and are falling into arrears there are a few things you can do to stop repossession of home, or at least delay it and buy yourself some extra time.

We've detailed some of the ways for you below:

1. Become stricter with your finances

You might feel that your money is all spoken for, every time you get paid it just disappears, however if you make a list of your expenditures each month you may be surprised at some of the little non-essential items that you could really cut back on.

Cut down on any of the luxuries and save the pennies and you may end up saving more than you then, over the course of a few months you’ll notice a difference.

Any extra money you can pay to the mortgage company will help keep them at bay and understanding of your situation, making even smaller payments can help you buy time.

2. Get expert advice

Although you won’t have additional money to pay for legal services, it is possible to get some advice for free from various experts.

There are a few charities who can give you relevant information as well, Citizen Advice may even be able to help you.

Depending on your situation, you also might be eligible for legal aid so look into that before considering any other options.

If you’re struggling to repay your mortgage because you’ve lost your job or your health has affected it, then you may be entitled to certain benefits.

3. Check if you're entitled to benefits

Although the amount you’ll receive might not cover your mortgage repayment, it will help to take a bit of the pressure off and it's always worth looking into to see if you can get a bit of extra help from the Government.

It is worth noting that some benefits will qualify you for Support for mortgage Interest (SME) which will help with your mortgage.

4. Talk to your lender

When you miss your first mortgage payment your lender will call you to try and figure out a bit more about what has happened.

It is at this point that you should explain your situation and tell them that you’re struggling, don't try and hide the facts or not inform them as this will lead to more issues.

If you are honest with them, it's likely they will work up a ‘payment arrangement’ between you and your creditor.

The lender will only start legal proceedings if you fail to make any of the amended repayments for the next 3-6 months.

5. Sell your house fast

If your financial situation looks unlikely to improve then it might be worth considering selling your house quickly for a cash sum to The Property Buying Company.

Although this may not be ideal, it will enable you to receive a lump of money and you’ll stay in control of the sale. You can do this via a traditional estate agent, however this may take a long time.

Alternatively, you can use a quick cash buyer like us as we can buy your house in as little as 7 days, which makes you able to stop repossession of home before your lender takes further action.

Although you’ll get slightly less than the market value of your property, you’ll receive a fair cash sum and we will work to your timescale, and are more than quick enough to help with house repossession.

In addition, all legal fees are included so it won’t cost you a thing, which is obviously extremely beneficial if you are strapped for cash.

Provided you have equity in your property, the money you’ll receive from the sale will pay off your mortgage arrears and the rest is yours to keep.

Stop house repossession advice

Only seek legal advice to stop house repossessions from a professional, there are a lot of articles out there that you can find when researching that will provide you with mixed information, which could be more harmful than good.

Although we are able to point you in the right direction, we would suggest that you do your research first in order to make the best decision for you.

You can get free advice on how to stop house repossessions or better manage your finance from several trust worthy places, here are some of the main services that can help you when you're in a tight situation:

What happens after a house repossession?

If you've not managed to stop house repossession, after your home has been repossessed it doesn't necessarily mean you're out of the woods, which is why it's really important to sell your own house whilst you still have control.

If the repossession of home goes through your lender will look to sell the property and recoup their losses on the mortgage, they will try and sell the property which they typically do by auction.

In doing so they will incur legal fees, auction fees & lose money over the duration of the sale, all of which you will be liable to cover, and the amount of this can seriously rack up.

This can sometimes be covered by the equity you have in the property or if property prices have increased and they get a good price for it, but ultimately you need to repay what you owe the lender.

If you are in control of your own sale, it means that you won't have to cover all the fees the mortgage company would incur which will mean that you're likely to be left with a lot more of the equity to yourself.

When the property sells, the proceeds can cover the rest of the mortgage on the home. However, depending on fees such as solicitors and estate agents, it might not cover the mortgage, and in most cases, the borrower still has money to pay towards the mortgage.

When the house is repossessed and sold, you will have to move out, and it can leave you in a situation of homelessness, debt and a damaged credit score. Depending on how long it takes to sell, you’ll still be liable to make payments towards your mortgage before it sells.

Where do you live after repossession of house?  

If you face repossession in the UK, you may qualify for council housing, but eligibility varies based on individual circumstances. Local councils are obligated to assist those who are homeless or at imminent risk of homelessness.

If you’re at risk of repossession without alternative housing options, contact your local council as soon as possible, as housing availability and waiting lists vary by area. Other options include private rentals or housing associations.

Councils have a duty to help those threatened with homelessness within 56 days, subject to certain criteria. Eligibility depends on factors like unintentional homelessness, priority needs and local connections.

Priority needs are assessed considering vulnerable household members, including pregnant women, dependent children, the elderly, individuals with health issues and domestic violence victims. 

Can I avoid repossession by selling my property?  

As property buyers for cash, we can purchase your property quickly in seven days, minimum. If you’re trying to avoid repossession of home as you can’t afford the mortgage or have missed a payment, selling your property may be a practical method.

You can sell your property with us if you have equity, owning a percentage of the home. Speak to our team and understand how we can help you reduce your risk of repossession. 

Are you considering selling your property quickly? As a team of trusted, expert cash buyers, we purchase properties for cash and handle the entire process, including solicitor costs. Our team can advise your property’s value and make the sales process quick and smooth. 

Our flexible approach means the journey is down to you. We help you choose a suitable completion date and sell within seven days minimum. Contact our team today, and we can help you sell your property quickly. 

Can I sell my house with mortgage arrears?

Simply put the answer is yes, you can sell your house with mortgage arrears.

If you're a homeowner that has unfortunately fallen into arrears then you will have an outstanding debt with the mortgage company, but selling your home can help with this and is one of the best ways to stop house repossessions.

Selling your property is likely to release a significant sum of equity, as long as your property has risen in value or you've been making mortgage for months / years prior to the recent struggle, then the sale of your property should generate some extra money which can be used to clear any of the debt you have accumulated.

If you start to fall into arrears, selling your home can be a good way of paying this off, if you are unable to work something out with the mortgage company.

It's best to act quickly before repossession of home proceedings begin, in order to give yourself enough time to sell your property, depending how long down the line you are with your arrears, you may need to seek a quick sale, which is something we can help with.

Will I be able to get a mortgage after repossession?

If you don't get repossessed and manage to sell your property before having this mark on your credit file then yes of course it will be easier to get a mortgage than if you go through the repossession process.

It isn't impossible to get a mortgage if you have had a previous repossession, it's just much harder.

It's important to understand before you apply for a mortgage how they will assess you after a repossession, some mortgage companies will be easier to get accepted for than others with stricter criteria.

There are also a few factors that will affect how easy it is to get a mortgage after a repossession including:

• How long since the repossession: The longer it has been the more likely you are to get a mortgage, over time your credit score should hopefully improve.

• The amount of deposit you have: Lenders may expect you to have a much larger and significant deposit to put down if you've had a previous repossession, this minimise their risk in lending to you as it means there is a lot of equity they could recoup should you fall into mortgage arrears again.

• The amount of your repossession debt: If you were repossessed owing millions of pounds, then you are obviously going to be higher risk for a lender than someone who was repossessed based on just a few thousand. They'll look into this when deciding whether they should lend to you.

• Your current credit status: A repossession is likely to hit your credit file pretty hard, you need to work on building it back up. If you've had issues with a CCJ or IVA then this might also make things a lot harder, but the more years that pass the less of an effect they have.

Act quickly & stop repossession of home

If you’re facing repossession and need to sell quickly to retain some equity, time is of the essence. Traditional sales or auctions often can’t complete the sale within the critical 3 to 6 month window.

Our service can buy your house in as little as 7 days, fast enough to prevent the repossession of homes. We’re experienced in property buying and can guide you throughout the entire process.

We’ve successfully assisted hundreds of homeowners at risk of repossession, purchasing their homes swiftly, covering all fees, and enabling them to clear their mortgage arrears, thus avoiding repossession stress.

Why choose The Property Buying Company when facing repossession?

With over 100 years of combined property industry experience, we’ve catered to various circumstances including repossession risks. We provide ourselves with honesty, transparency and handling everything for you. 

While we can’t offer full market value, our transparent service provides a fast sale, usually within as little as 7 days, without estate agent fees, mortgage approval, or ongoing utility and council tax bills.

We will usually offer around 80% to 85% of your home’s market value, varying based on property condition and location. With no obligation, you can request an offer through our ‘get an offer’ button for valuation. 

Our service benefits include:

• A fair below market value cash offer.

• A timeline that suits your needs.

• All legal fees included, with no hidden costs.

• Opportunity to retain some equity.

• Assistance with onward purchases.

• Expert advice and support throughout.

Selling to avoid repossession is a significant decision, which means you need to trust your buyer. We are an accredited member of both The Property Ombudsman (TPO) and the National Association of Property Buyers (NAPB), ensuring high standards and fair treatment. Our commitment to professionalism is echoed in our TrustPilot reviews.

Repossession of home FAQS