What is repossession?

Coronavirus update: repossessions are on hold

The Financial Conduct Authority has said that mortgage lenders shouldn't start or continue court action for repossession until at least 31 October.

That means they must not go to court for a repossession order or ask bailiffs to evict you.

You can ask your lender for support if you're struggling because of coronavirus.

What is repossession?

Your mortgage lender has a financial stake in your home.

Your lender can apply to court for a possession order if you have mortgage arrears. They do this so they can sell your home and recover the money you owe. 

Repossession should be a last resort.

Tenants can be affected by repossession if your landlord has mortgage arrears.

The repossession process

You won't always lose your home if you have mortgage arrears. 

Find out about the process and steps you can take to avoid repossession.

Voluntary repossession

Voluntary repossession is when you return the keys to the lender so they can sell the property without waiting to be evicted.

It's hardly ever a a good option as you:

  • probably have to pay for somewhere else to live
  • remain liable for the mortgage until the property is sold  
  • could be found intentionally homeless if you ask for council help with housing

Get advice before giving up your home voluntarily. There's likely to be a better option.

Finding a new home after repossession

The repossession process can take several months. You have time to plan and look for another home if repossession is unavoidable.

Find out more about your housing options after repossession

What happens to your home after repossession

The lender sells your home and keeps some of the proceeds to pay off:     

  • your mortgage debt
  • legal costs of repossession
  • costs of sale

Any other loans secured on the property are also paid off from the sale. 

Lenders can take further action to recover their money if there's not enough equity to pay off the debt.

Any money left over from the sale must be paid to you.

Last updated 06 November 2019 | © Shelter

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