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How to Stop House Repossession: Everything You Need to Know

We often assume that when we move out of our home it will be on our terms. You dream of a new upgraded home. Of relocating. Of downsizing when the children have left. However, life can throw curveballs and falling behind on mortgage repayments can result in you losing your home. However, there are ways to stop house repossession. Our guide highlights everything you need to know about repossession and your options to avoid it.

What does repossessed mean?

Unless you buy a property with cash and you own it outright, you will have a mortgage in place. Your lender will have arranged the finance for you and will take a monthly mortgage repayment form your account. The amount you pay back every month will depend on the amount borrowed and the number of years your mortgage term is.

Buying a house is lifetime achievement for many. However, when you fail to meet your monthly mortgage payments you fall into mortgage arrears. This is when you have missed one or more payments. Your lender has a financial claim on your property; after all, they lent you the money to facilitate the purchase in the first place.

If you can pay off your arrears in full, fantastic. Your lender will be pleased you’ve settled your debt and as long as future payments are on time you won’t need to worry. If you cannot make repayments the lender, as a last resort, are within their rights to repossess your property via the courts. A court are the only party that can decide whether you can be evicted, and your property repossessed. However, this can be avoided, and your lender will be able to discuss different options with you, which we will look at later in this guide.

What causes a property to be repossessed?

The reasons as to why a property is repossessed are varied. All homeowner’s finances are different, and it shouldn’t be forgotten that they can change quickly. Repossession only becomes a potential action when you fall into mortgage arrears – even one missed payment is considered arrears.

Common causes of mortgage arrears

Behind the financial problems causing people to fall behind on mortgage repayments is a root cause. Some of the most common include:

  • Divorce
  • Bereavement
  • Redundancy or job loss
  • Accident or illness
  • Bankruptcy
  • Lease breaks

Understanding the house repossession process

The Repossession Process is where your mortgage provider takes over ownership of your property, due to consistent missed mortgage payments. With Gaffsy, we have the track record, funds, and experience to quickly purchase a property in time to stop a repossession.

Generally speaking, lenders don’t want to repossess your property, it’s a time consuming and costly procedure and is only considered by them as a last resort. Before any legal action is taken, regular letters will be sent informing you that payment is overdue, it is generally only after 2-3 months of missed repayments that repossession proceedings will begin.

Failure to liaise with your lender or settle on a repayment plan will likely trigger the following.

Possession order

If your lender is dissatisfied with your efforts, or if you financially cannot pay them back, they will apply to a local county course for a repossession order. They will detail why they would like to repossess your home and this will be passed to the courts.

Notice of Hearing

A notice of hearing will inform you that a county court will evaluate your case, they will examine your financial situation to see if you have a realistic chance of repaying what is owed. If you fail to demonstrate an ability to pay, the repossession process will commence. Alternatively, if you engage with the process and come up with a logical and clear payment plan, County Courts are likely to side with you.

If the court decides a repossession is appropriate an eviction date will be set for the near future and bailiffs will attend to remove you and your belongings if you do not vacate. All costs associated with the repossession, including legal fees, bailiffs and asset management fees will be added to your debt, often running to many thousands of pounds.

Selling to a professional property buyer like Gaffsy can allow you to avoid this process entirely, with no fees whatsoever and a fair price offered, it is likely to be a more convenient and less costly option than repossession, get in touch today for a free quote.

Defence form

You will also be supplied with a defence form. You can use the defence form to detail why you think the lender should not repossess your home. You will need to return the defence form within 14 days to the court.

Court paperwork

The court will invite you for a hearing following correspondence from your lender via the repossession order. They will provide you with a date and time, as well as a copy of the claim the lender has made against you.

You will also be supplied with a defence form. You can use the defence form to detail why you think the lender should not repossess your home. You will need to return the defence form within 14 days to the court.

County court case

You will attend court and your lender will send a representative too. Just like any court case, the judge will take the evidence on board and hear from both parties.

The judge will make one of the following decisions:

  • Grant repossession and eviction so the lender can sell the property to be reimbursed
  • Suspend the possession order allowing you to stay in your home abiding by special conditions set by the judge
  • Adjourn the case and rearrange another date so you can liaise further with your lender
  • Dismiss the case and you can remain in your home

What happens when your house is repossessed UK?

If the judge decides that repossession is the best course of action this will take place in 28 days. There are circumstances where this is extended to 56 days but it can come at an added cost to you. At this point the court will apply for a bailiff’s warrant to enable eviction and repossession.

Following your eviction the property will be sold by the lender. You may be asked to pay interest on the outstanding money you owe.

Sale by the Lender

Once the lender has possession of your property, they will place it for sale on the open market. All of the outstanding debt, plus interest and additional costs will be kept by the lender, the rest of the money (if any) will be sent to you. It is possible that the property sale does not cover what you owe, in which case the additional funds will still be owed by you and the lender has a right to pursue you with all legal means to recover their debt.

What rules do lenders have to follow before they can repossess your home?

  • Inform you in writing of how much you owe
  • Respond in writing to any payment offers you have made
  • Consider requests from you to change how you pay your mortgage
  • Give you ample time to consider any proposals they put forward
  • Provide written reason if they turn down any payment offers you have made
  • Give you 15 days written warning if they are planning to start court action
  • Inform you of when the court date is
  • Inform the council within 5 days of receiving court hearing information

How long does a house repossession take?

On average, the repossession process can take up to nine months. It’s not a quick process and, even if it’s happening to you right now, there is still time to resolve your arrears if you can. Even if your lender has put forward a repossession order, this does not mean your home with end up being repossessed. Lenders do not want to repossess your home; in fact, many are more likely to give you a few months’ grace to get your affairs in order than start the process.

House repossessions can take longer if:

  • There are legal or complex issues
  • Your property is failing to sell
  • Your county court is busy
  • You have not received your court appearance notice

How to stop home repossession happening

If you’ve fallen into mortgage arrears there are ways that you can avoid repossession. It is a last resort for lenders and will only be pursued if all other options have been exhausted. There are ways to stop repossession and we will cover these below.

Contact your lender

Even if you haven’t missed a mortgage payment, but are struggling financially, being open and honest with your mortgage lender is the best route to take.

Regardless of your arrears, the last thing your lender will want to do is repossess your home. Therefore, communicating with them frequently and having frank discussions is vital.

It is likely that your lender will offer you a variety of solutions, one of which will hopefully suit you. Common options include:

  • Changing to an interest only mortgage
  • Adding your arrears to the mortgage itself
  • Taking a mortgage holiday
  • Selling an endowment policy

Alternatively, you can put together a holding letter – this will need to detail why you’re in arrears and show willing to pay your arrears. It is also worth mentioning that you will come back to them shortly with a plan if they have not discussed one with you.

Lenders have helped people in your position before and will be able to help you as long as you’re honest from the get-go.

Get expert help

You should seek legal or financial advice from an independent party as soon as possible. They can help you follow up with your lender following your holding letter. The next correspondence should outline, in detail, how and when you will repay.

Once the lender has received your proposal they have ten days to respond. Equally, if a lender puts forward a proposal, you have ten days to respond too.

Your lender will either agree to your plan of action, put forward another suggestion, or inform you that they are going to proceed with the repossession process.

However, don’t forget that before any of this can happen, your lender must send a letter to you first. This should detail the amount of money you owe, the total amount you owe on your mortgage, and any further interest that is to be added to the arrears. Without this pre-action protocol being in your possession the lender cannot proceed with legal action.

Letting your home

Some individuals facing repossession have been able to avoid repossession by letting their home. This can either be taking in a lodger or moving into alternative residence and renting out the entire property. Whilst the turnaround on this would need to be relatively swift to start benefitting from the rent being paid, and thus putting it towards paying off your mortgage arrears, it is an option that has worked for some facing repossession.

How can Gaffsy stop repossession?

1. Get in touch
Fill out our enquiry form or give us a call, we’ll take some details over the phone and come back to you with a proposal on the same day.

2. We make you a cash offer
We will make you a no obligation cash offer, we use only our own funds and have a team of highly regarded solicitors ready to go, this means we can move with the speed needed to stop an eviction.

3. Offer accepted
Once we have agreed a price, we will aim to exchange contracts within a matter of days, showing your lender that a purchaser has been found and repossession proceedings are now unnecessary. Once the purchase is complete, the solicitors will handle the transfer of owed funds to the lender, with the remainder going to you, we charge no fees whatsoever so rest easy knowing you will receive the full amount due to you.

At Gaffsy, we know this is an immensely difficult period and we are ready to work with you, if you need some time before leaving the property to plan your next steps, some help moving or even help finding your next home we are always happy to work with you to ensure this is as stress free as possible.

Voluntarily selling your home

Understandably selling your home on the open market isn’t an option when facing repossession as the average sale in the UK takes an average of just over 4 months. By this point you could have fallen into further arrears and the repossession process could be well underway. Using a company such as ourselves who operate as cash house buyers, we can help you sell your house fast.

We don’t charge a penny to sell your house for you, so you don’t need to worry about having to find the funds to cover legal fees. You will need to assess whether the value of your home we provide is enough to cover the mortgage debt you have.

With Gaffsy, you can secure a guaranteed quick house sale by obtaining a free cash offer today. We have the funds available to buy your property from you for cash which means you can sell as quickly as you like. The money from the sale can then be used to pay your outstanding arrears and move on from the situation without your credit score being affected. This means you can buy in the future without repossession being on your record.

Can you plan to avoid repossession in the future?

Whilst you cannot even begin to determine what will happen to your personal circumstances and finance over your mortgage term, there are ways to semi-prepare should the worst happen. Putting steps in place to help buffer any financial issues in the future can be a wise move.

Overpaying on your mortgage

Perhaps a way of mitigating repossession in the future rather than providing a solution when you’re already in arrears is overpaying on your mortgage. Most providers allow you to pay up to a certain percentage extra every year, typically 10%, although it does vary. Overpaying is helpful if you fall into financial difficulty in the future as you will have built up extra equity whilst also showing your lender you’re dedicated to paying off your mortgage. You won’t have to pay any interest on your overpayments.

Mortgage payment protection insurance

Known as MPPI, mortgage payment protection insurance is a form of income protection. MPPI policies provide cover for your mortgage payments should you be made redundant or cannot work due to accident or illness.

Mortgage insurance can cover repayments in full as long as they don’t exceed 65% of your gross salary, regardless of whether you have a repayment mortgage or interest-only mortgage. Cover is usually up to 12 months, unless you return to work sooner.

MPPI is particularly attractive to those who are self-employed as you would not receive sick pay or a redundancy pay out like that of regularly employed person.

Stop repossession now

If you are facing repossession, get in touch with Gaffsy today. Our expert team are here to help and can offer a no fee solution for those in mortgage arrears. If you’ve exhausted alternative options and are considering a fast house sale, simply contact us today or get a free cash offer to get the ball rolling.

  • We can buy your property from you as quickly as you require
  • We understand your situation and can create a plan with you regarding you leaving the property post-sale
  • The process is transparent and on your terms
  • We provide a cash offer and can inform your lender of this if you choose to go forward with us