Being told your home is going to be repossessed due to missed payments can be worrying, but knowing what to expect when it happens can help you prepare and potentially even take steps to avoid the repossession process altogether.
How long will it take for my home to be repossessed?
There is no fixed timeframe for the repossession process, but it usually takes around six to 12 months from your first missed payment to losing your home.
Remember, a mortgage is a secured loan, so breaking the terms of your credit agreement will put your home at risk.
It's important to note that you'll never be asked to leave your home suddenly. Mortgage lenders are legally required to follow a strict set of steps to ensure they explore alternative solutions and give you several opportunities to repay your mortgage arrears before taking you to court. This is called a 'pre-action protocol'.
Lenders also view home repossession as a last resort due to how time-consuming and costly it can be, so they would rather come to a mutual agreement with you before they resort to legal action.
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Check my eligibilityWhat happens when a house is repossessed?
The house repossession process usually follows a certain set of steps, which we've outlined below:
Your lender contacts you about missed payments
Your lender will usually contact you if you've missed a payment and you haven't made up for the money owed within 15 days, but you should contact them first.
They will try to arrange a repayment plan with you and may agree to give you a payment holiday, where you temporarily pause your payments until you get back on your feet.
Your lender starts court action
If you continue to miss further mortgage payments and fail to come to an arrangement over how to repay the debt, your lender may start court action.
However, before your lender applies to the court for a warrant to repossess your home, they must provide you with a list of all your missed payments and the total level of debt owed. You will then be sent several documents, including a defence form, which you must complete and return to the court.
You attend a court hearing
Once a possession order has been granted, you'll be invited to a possession hearing at your local county court, which you must attend unless in exceptional circumstances (e.g. sudden and serious illness).
Failure to attend the possession hearing could result in you being served with an outright possession order, which requires you to leave your home in as little as 14 to 28 days.
The court makes a decision
There are three outcomes of a possession hearing: an outright order, a suspended order, and a dismissed order.
An outright order is more serious, as it sets a fixed date by which you need to leave your home. This could be as soon as two weeks after the possession hearing.
A suspended order, on the other hand, is a type of court order that allows you to stay in your home, but you must follow set rules as set out by the court. This usually requires you to pay a set amount on top of your usual monthly mortgage payments going forward.
Alternatively, if the judge decides your lender has no grounds on which to repossess your property, they may dismiss the repossession order altogether. When this happens, your lender will have to restart the repossession process.
Enforcement agents visit you
If you're served an outright possession order or you break the terms of your suspended possession order, your lender can send bailiffs or sheriff officers to evict you from your home.
When this happens, bailiffs will change the locks, and your lender will usually list the repossessed property with an estate agent or auction house to sell your home for the best price. Repossessed sales often move more quickly than standard home sales, and lenders typically favour cash buyers, as they have the money upfront.
Once the sale is confirmed and all of your secured creditors have been repaid the money they are owed, you will receive any money left over.
However, if you owe more than the property sells for (called being in negative equity) or the court applies for a money judgement requiring you to repay the debt, you may have to make up for the remaining money owed (known as the mortgage shortfall).
Find alternative accommodation
If your home has been repossessed and you're worried about becoming homeless, it's important that you find alternative accommodation as soon as possible, especially if you have children or dependents.
By law, your local council has a duty of care to discuss available housing options and, in extreme circumstances, they must provide temporary accommodation for you and your household.
Finding a new place to live can be difficult if your home has been repossessed and your credit rating has been affected, but renting with a private landlord may incur fewer checks than renting through an estate agent. If you want to get a mortgage, your recent repossession will be taken into account, and you'll likely be offered a higher interest rate and will have to pay a larger deposit.
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Do I have to pay fees if my home is repossessed?
Aside from the remaining amount on your mortgage, lenders will usually add a number of additional costs to the total amount owed.
These fees are typically deducted from the proceeds when your home is sold, but if the sale doesn't cover the total amount, you must pay the difference.
Legal costs
You will be charged for your lender's legal costs for the duration of the eviction process. This includes all related court costs.
Eviction costs
You will need to cover the cost of any enforcement action taken during the eviction process. This includes the cost of sending bailiffs or sheriff officers to your home.
Property maintenance
Any maintenance required (e.g. repairs, security or insurance) during the time between the eviction and the sale of the property will remain your responsibility.
Can I avoid repossession?
The key to avoiding repossession is to take action as soon as possible and, ideally, before you miss your first mortgage repayment.
Contact your lender immediately
The sooner you inform your mortgage lender of your money worries, the sooner you can put a plan in place to get back on track. Most mortgage lenders have specialist teams that are trained in helping borrowers who are worried about affording their payments or who have already missed payments.
They may suggest a temporary payment reduction, payment break, or interest-only mortgage.
Seek free advice
If you're worried about your house being repossessed, there are many places where you can access free confidential support, from debt help companies, charities, and government organisations.
They should be able to assess your financial situation and outline your options for moving forward, whether that's with a formal debt solution or budgeting advice.
Check if you have insurance
If your mortgage agreement has mortgage protection insurance included, it may cover the cost of your mortgage payments for a short time (usually 12 to 24 months) if you become seriously unwell or lose your job. This can help you prevent mortgage debt and ultimately avoid repossession.
Because lenders view repossession as a last resort, this can buy you more time.
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Where can I get further advice and support about the home repossession process?
There are many home repossession myths out there, and it can be difficult to know what to believe. But by seeking free, confidential advice tailored to your circumstances, you can separate fact from fiction and decide how you're going to move forward.
From financial charities to debt help companies, simply talking about your missed mortgage payments can help you know that you're not alone and, more importantly, that help is always available.
It can also allow you to put a plan in place for dealing with it and potentially avoiding the repossession process altogether.
Conclusion
Knowing what happens when your house is repossessed can help you navigate the process with confidence. Mortgage lenders will try to reach a mutual agreement with you before trying to repossess your home, so you will have several opportunities to repay the debt and keep your home before you're asked to leave.
There are also safeguards in place to ensure you can access housing support and advice both before, during, and after your eviction date, so you don't have to face the situation alone.
Whether you're facing repossession or you're worried about missing mortgage payments, it's crucial that you take action as soon as possible. Burying your head in the sand may feel like the better option in the moment, but it will only make the situation worse in the long run.
