How to Avoid Repossession of Your Home

How to Avoid Repossession of Your Home

Losing your home to repossession can be emotionally and financially devastating. If you're struggling to make mortgage payments, it's important to act quickly to avoid repossession. This article outlines the repossession process in the UK and provides tips for homeowners on protecting their property.

How Long Does It Take for Lenders to Repossess a Home?

Most lenders won’t immediately move to repossess your home if you miss a mortgage payment. They accept that life sometimes happens, or a bank payment gets messed up for whatever reason. As long as you contact the lender and explain your situation, they will try and work with you where possible. This could mean offering you a temporary payment holiday or switching you to an interest-only deal. The lender should give you time to sell your home if you can’t agree on a repayment plan.

The most important thing at this stage is to reach out to your lender and explore your options.

The exact timeline for a home repossession varies, but most lenders in the UK have signed a mortgage charter that says they won’t force people out of their home within a year of a missed payment unless there are exceptional circumstances.

The process for repossession usually goes as follows:

  • 1-3 missed payments: The lender contacts you requesting payment and details of your financial situation.
  • If you can’t agree on a payment plan with the lender or ignore their communications, you'll receive a formal notice advising you that legal proceedings will commence if payments are not made.
  • The lender starts court action.
  • You will receive paperwork from the court.
  • There will be a possession hearing, where a decision is made.
  • Bailiffs will be asked to evict you 14 days after an eviction warrant has been granted by the court.
  • If you are evicted, the lender will then sell your home and the proceeds of the sale will be used to pay off the outstanding mortgage balance. If this doesn’t clear the debt, you will be asked to repay the shortfall. If there is money left over from the sale, it will be passed on to you.

As you can see, lenders must follow strict protocols before seizing property. This gives homeowners significant time to take action to avoid repossession.

What Happens at a Repossession Hearing?

Repossession hearings take place at a county court. They don’t last long but you may have to wait around a long time for the hearing to commence. You should bring along the defence form and any paperwork you can use in evidence, such as proof of a job offer, evidence you are trying to sell your home, proof of income, etc.

The two possible outcomes at a repossession hearing are:

  • An outright order
  • A suspended order

The first is more serious, as it sets a firm date for you to leave the property, sometimes within four weeks of the hearing. The second lets you stay under the terms set by the court.

If the judge makes a suspended order and you break the terms set by the order, the lender can apply for an eviction warrant from the court and you’ll be evicted 14 days after notice has been served.

What Can Homeowners Do if a Lender Threatens Repossession?

If you receive a notice that your lender intends to repossess your property, don't panic. There are still options to avoid losing your home:

  • Contact your lender immediately - Explain your situation and request an alternative repayment plan tailored to what you can afford. Most lenders wish to avoid repossession.
  • Seek financial advice - Speak to a debt advisor or financial counsellor at Citizens Advice for help managing your mortgage and overall finances. This can often help you avoid repossession.
  • Apply for government mortgage assistance - Programmes like Support for Mortgage Interest can provide financial support if you're unemployed or on a low income.
  • Look into a mortgage holiday - Your lender may agree to a temporary suspension of payments to get you back on track. Interest still builds up during this period.
  • Consider selling your home - If keeping up with payments is ultimately unaffordable, voluntarily selling may allow you to recover equity and avoid debt.

Contact us if your lender has started court action. We can help with repossession, negotiate with lenders on your behalf, and help you through the court process. There are no upfront fees, and we are available 24/7.

The earlier you seek help, the more options you'll have. Avoid burying your head in the sand, as this may result in the loss of your treasured home. With proactive management of a repayment plan or alternative arrangement, repossession can usually be avoided.