UK home repossession

Have you missed mortgage payments and are worried about your UK home being repossessed? Or perhaps you’ve already received a letter from your mortgage company to inform you that they’re taking you to court with a possession order, or worse, you’ve already been to court and have been served a possession order on your home.

Sadly, none of these are a rare occurrence in the UK, especially not at the moment with the current cost of living crisis and the Brexit and Covid hangover.

However, all is not lost. In this blog, we’re going to outline the UK repossession process and how you can fight to keep your home.

What is the process of UK Home repossession?

Home repossession happens when you fail to make multiple mortgage payments. Every case is individual but this is the usual process:

1. You miss mortgage payments.
2. Your lender informs you that you are in arrears on your mortgage and will ask you to resolve this – either by paying the outstanding payments or by setting up a payment plan so that you can clear the arrears over time.
3. If you fall further behind on payments or don’t communicate with the lender, you will be advised that they are considering court action. You may receive a few warning letters – absolutely do not ignore these.
4. If the lender has to take you to court, you will receive a big pack through the post that includes:
   • Copies of your mortgage statement and the original deed
   • Details of the arrears and proof that you have been informed of the arrears and offered support
   • Court papers. The court will receive an identical pack.
5. You’ll receive a notification from the court with a hearing date
6. When you go to court, you will need to present any evidence which is relevant to your case. If you can afford a prepayment plan you can offer it at this point
7. The judge will either agree to the payment plan and serve a suspended possession order, meaning that you will keep your home as long as you keep up with the payment plans. Or they will put a possession order on your home meaning that you have to leave by a given date and the mortgage company will own your home from that date.

I have a UK home repossession court date but it’s months away – what happens in the meantime?

Some courts are more up-to-date than others. Locally, for example, Basildon Court is completely up to date, whereas Southend Court is running approximately 7 months behind.

If you’re served a court date but it’s not for a while, this isn’t an excuse to get complacent or assume that all debt recovery is halted while you wait. ‘Normal collection activity’ will take place from your Lender (i.e. calls and letters) unless you speak with them.

I have spoken with lenders on homeowners’ behalves when they were experiencing mental health struggles due to this collection activity, and the lender agreed to halt collection activity for a certain time period.

Communication with your lender is the most important thing you can do in a home repossession situation

– Joanne Dron

If you feel you can realistically afford a repayment plan, you don’t have to wait for the court date – you can speak with your lender to arrange a payment plan.

It is ALWAYS better to communicate with the lender and offer a payment plan early before you receive a court order. Lenders want to help you to repay them (it’s much easier than going through the UK courts to repossess your home) but if you have already received a possession order, the chances are that the court hearing will still go through.

Why do I still have to go to court after my lender agreed to an arrears repayment plan?

Given that the lender will have paid approximately £700 court fees and £500 solicitor fees to serve you a possession notice, they will probably still go through with the court hearing even in the event that a payment plan is agreed – this will be merely to have the payment plan solidified in the eyes of the law and means that if you break the terms of the agreement they can more easily follow up with a possession order.

My home is going to be repossessed – what should I do?

1. Start by getting advice
   Seek advice from experts about your situation such as:
   • Citizens Advice
   • National Debtline
2. Communicate with your lender
   Open the lines of communication as early as possible and show that you want to resolve this. Be honest about your circumstances and work with the lender.
3. Know your budget.
   Think realistically about what you can afford for a repayment plan. It has to be sustainable without running you into the ground. A mortgage company and a judge are more likely to approve a payment plan that looks manageable than a fantasy offering which you won’t be able to sustain.
4. Be honest with yourself about the reality of the situation.
   In an ideal world, if you’ve fallen behind with your mortgage, you can come to an agreement with your lender to pay back your arrears. But unfortunately for some people, there will be a tipping point where it’s evident that they’re not going to be able to catch back up with the payments.

My advice as someone who helps people fight repossessions on a regular basis is to simply be honest with yourself at that point.

Rather than stretch the process out – causing further costs and court fees to build up, if it looks like it’s the point of no return the best thing you can do is to put your house on the open market sooner rather than later.

This will give you the best price for your home but it does take time so finding that acceptance and getting things moving with a house sale sooner rather than later will serve you well.

The longer the repossession process drags out, the more costly it is for you and the less you take away at the end. If you can’t sell on the open market for any reason, or don’t have the time or mental strength to go through the process, you might consider a cash buyer like myself.

My goal for this blog is to educate you as much as possible so that you can avoid repossession altogether, so if you do end up selling off-market, please ensure you find a buyer you can trust, who has good reviews and a proven track record. It is not unheard of for cash buyers to drop their price by £20,000 in the final days – knowing fully that the seller has no other option.

Take the sale off-market only if you feel sure that it’s the best option for your circumstances.

UK Home Repossession FAQs

What to do when you go to court for home repossession

1. Have all of your paperwork with you including an income and expenditure spreadsheet. You can download one here.
2. Have a plan ready to present about how much you can realistically pay back – with proof that you can afford it
3. Dress smart and be on time! Show that you take this seriously and don’t aggravate the person who decides whether you keep your home.

The judge will hear the case and rule on whether a payment plan is to be put in place, or rule in favour of the lender and issue a possession order for your home. (If possible they will always rule in the favour of the borrower)

What happens if you agree on a payment plan with your lender to avoid a home repossession?

1. The judge will agree that the payment plan you have offered is realistic and achievable (they won’t agree to it if they don’t think it will be sustainable for you).
2. You will be granted a suspended possession order which states that as long as you stick to the payment plan you will keep your home.

What happens if I break the terms of a suspended possession order?

If you don’t keep up your repayment plan or don’t attend court for your possession order hearing, the judge will rule that the lender can repossess your home. You will be told of the timeline and at the end of this time Bailiffs will be instructed to remove you from your property.

What happens if I’m issued with a possession order for my home?

If a possession order is granted by a judge, you will need to vacate your property by the time stated. Contact your local council or the Shelter charity as soon as possible if this will leave you homeless.

Your credit rating will be affected by the repossession meaning finding a rental property will be a little more challenging so it’s important to start looking into this immediately if you are going to rent. We have some advice about finding rental properties in Southend here.

Remember that you’re not alone, lots of people will be going through this at the same time as you and there are places where you can get support – reach out to friends and family, and if you don’t know where else to turn please call the Samaritans free for mental health support on 116 123.

How long can will my payment plan be to avoid home repossession?

This depends on your lender. Some lenders will want the arrears cleared in 12 months, I have known others agree to ten-year repayment plans!

This is further proof that every case is unique and what happens for one person won’t happen for the next. So always speak to your lender about your circumstances directly. Don’t trust hearsay or generalised advice.

Why are there different outcomes for different people when you fight a possession hearing in court?

The judge will look at your history – is this the first time you’ve ever been to court? Have you had good communication with your lender? Have you made reasonable measures to pay your arrears or can you prove that you have a plan to? Have your circumstances changed significantly enough that the repossession of your home no longer needs to go ahead?

Can a house repossession be reversed?

Yes!

If circumstances have changed, Let’s say you get a new job and can now afford the repayments you previously thought you couldn’t, or you found a buyer for your home, you can apply for an emergency court hearing to suspend the possession order.

Simply fill out an N244 form “for possession of a property located in England” for an accelerated court date where you can present your case to take back possession of your property.

Repossessions can be stopped within 24 hours of the Bailiffs arriving and you will likely be far better off by arranging a payment plan, selling on the open market, or finding a cash buyer than you will by letting the repossession take place.

Get support to take action to get the best possible outcome from the situation.

I’m Joanne. I’ve lived and breathed property for longer than I care to remember! This blog provides advice and support with problems surrounding property, and life in general.

 

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Previously on the blog…