Mortgage arrears possession process

Rules for bringing a possession claim and sending notices, filing a defence, and the court powers during the hearing.

This content applies to England & Wales

The possession claim

A mortgage lender must follow the procedure contained in Part 55 of the Civil Procedure Rules when it takes possession action against a borrower.

The possession claim must normally be brought in the County Court. 

The claim could be brought in the High Court in the case of:

  • complicated disputes of fact

  • points of law of general importance

  • claims against trespassers where there is a substantial risk of public disturbance or of serious and immediate harm to persons or property[1]

The County Court issues a claim form N5 to the borrower. The claim form contains the details of the location, date, and time of the possession hearing.

The claim form must be accompanied by the particulars of claim on form N120. It must contain details of the:[2]

  • amount borrowed

  • amount of outstanding arrears

  • current mortgage balance

  • any other outstanding payments, for example, interest or insurance

  • any information the lender has about the borrower's circumstances

  • what it knows about welfare benefits claimed by the household

Possession claims online

The mortgage lender can start the claim online using the possession claims online service (PCOL) the claim is for mortgage arrears only, and not for a different breach of the mortgage contract.

Where the possession claim is started online, the lender may send particulars of the claim to the borrower within seven days of the claim being issued.[3]

Defendant's response to the claim

A borrower who wants to defend the claim for possession must file a defence within 14 days of receiving the claim documents.[4] A defence is filed by sending it to the court.

The claim is listed for a hearing whether the borrower files a defence to the claim or not.

The defence must be in the court issued form N11M.

Possession claims online (PCOL) allows the borrower to file their defence online for claims that were issued using PCOL. A username and password is issued to the borrower with the claim form.[5]

Offer to pay

Form N11M can be used to make an offer of payment of mortgage arrears. The offer should normally demonstrate that the borrower will be able to pay their ongoing mortgage payment plus an amount towards the arrears.

Borrowers who cannot afford to pay their contractual instalment and clear the arrears in a reasonable period need to request:

The borrower could use an online budgeting tool to help calculate their outgoings. A budget planner is available on the Money Helper website.

Raise a dispute about facts or law

The defence form does not have much space to provide details of a dispute about the facts or the applicable law. Legal arguments can be submitted on a separate document headed with the parties' names and the claim number, clearly marked as an additional defence.

The borrower should submit a witness statement explaining their side of the case if there is a dispute about the facts.[6]

Read more about how to submit a witness statement on Shelter Legal.

Notices to the occupier and local authority

Within five days of receiving notification of the hearing date from the court, the lender must send a notice stating that a possession claim has been started to all of the following:[7]

  • the property, addressed ‘the tenant or the occupier’

  • the housing department of the local authority within which the property is located

  • any registered proprietor of a charge over the property other than the lender claimant

The lender must produce a copy of the above notices and evidence that they have been sent at the hearing.[8]

The lender is also required to give notice to any person who has registered their interest in the property under the Matrimonial Homes Acts 1967 or 1983 or the Family Law Act 1996.[9]

What happens at the court hearing

The court sets the date for the possession hearing when it receives the claim form. The hearing date should be between four and eight weeks from the date the claim was issued.[10]

At court, the borrower is called the defendant and the mortgage lender is the claimant.

Most possession cases are dealt with in less than 10 minutes. If the case will take longer because the facts or law are disputed, the judge will usually adjourn the case and list it for a longer hearing or a trial.

The court can either either:

Housing possession court duty schemes

The duty solicitor provides advice to borrowers before the hearing, and representation in the hearing. They can explain the terms of any order to the borrower afterwards.

Duty advice at court is in scope for legal aid. It is free to all mortgage borrowers and is not means tested. The GOV.UK website has a list of duty advice providers.

The borrower should arrive at court in plenty of time to speak to the duty solicitor, unless they have made other arrangements to be represented. They should find the court usher as soon as they arrive, give their name, and ask to see the duty solicitor.

Addressing the judge

Most possession claims are heard by a district judge.

The lender or their representative speaks first and tells the judge what order they want them to make.

The borrower or their representative speaks next. They can ask for the order they would prefer and provide relevant reasons why the judge should not order possession.

Orders the court can make

The court has wide powers to decide the claim on the day of the hearing. The judge can make an order after hearing from the lender and the borrower, or if the borrower does not attend.

Outright possession order

The judge can make an outright possession order if the lender has shown it is entitled to possession of the property, and the borrower has not persuaded the court to suspend the order or adjourn the claim.

The possession order gives a date for possession, usually 14 or 28 days from the date of the hearing.

Suspended possession order

A suspended possession order means the borrower can remain in their home as long as they comply with certain terms.

The judge will usually suspend possession if the borrower can show they can make regular payments towards their arrears on top of the monthly instalment.

In some cases the judge can suspend possession on lower payments. This is called a time order. It is only available for regulated mortgage contracts.

Read more about time orders in mortgage possession claims on Shelter Legal.

Adjourn on terms

The judge can adjourn the claim on terms. This means no possession order has been made. It allows the borrower to demonstrate they can keep to payment terms.

The claim is normally only adjourned on terms if the borrower has cleared some or all of the mortgage arrears before the hearing.

The lender can apply to reinstate the possession claim if the borrower fails to keep to the terms of the adjournment.

Adjourn to a fixed date

The judge can grant an adjournment to put off the decision about the case to a later date.

An adjournment could be granted to allow the borrower to:

  • get more evidence about a house sale or lump sum

  • get detailed legal advice about their defence

  • file a counterclaim

The new date is not usually set at the possession hearing. The judge makes a request to the court that the matter is to be relisted on 'the first open date after xx days'.

The borrower normally pays the costs of the additional hearing, so they should only ask for an adjournment if they need one.

Directions for a trial

The judge can adjourn the case with directions for the lender and the borrower. Directions tell the parties what they need to do next. They are usually given in when the court needs more evidence to make a decision about a case, or where the borrower has a substantive defence.[11]

Dismiss claim

The judge must dismiss the lender's claim if they are not satisfied that they do not have a right to possession or if the claim is defective.

Give tenants more time

The judge can postpone the date for possession for up to two months if there are unauthorised tenants in the property, whose tenancy is not binding on the lender.[12]

Money judgment

A money judgment is a court order for the payment of a debt. The lender usually includes a claim for a money judgment.

The money judgment can be enforced in the same way as any other County Court money claim, for example by a court bailiffs warrant to take control of the borrower's goods.

If the judge sets payment terms to deal with mortgage arrears, enforcement of the money judgment is suspended on the same terms.

Costs order

Mortgage agreements usually contain a term that allows the lender to add their legal costs to the mortgage. This is called an indemnity clause.

The court does not make an order for costs in mortgage cases unless it is asked to do so by the borrower. The borrower can ask the court to make an order that the costs are paid by the lender if the:[13] EWHC 2862 (Ch)

  • court action was unreasonable

  • amount of costs is unreasonable

The court could make a summary decision on the day, or refer the costs for detailed assessment.

Read more about types of orders in mortgage possession proceedings on Shelter Legal.

Lender's application to enforce a possession order

If possession is given outright, or the terms of a suspended possession order are not complied with, the lender can apply to either:

Permission of the court

The lender must apply for permission from the court to enforce an order where six or more years have elapsed since the order was made.[14]

Notice of eviction

A notice giving the time and date of the eviction must be delivered by Enforcement Agents (known as bailiffs) to the premises 14 days before the eviction date.[15]

The court can dispense with the requirement to serve a notice, or change the time by which a notice of eviction must be delivered.

Execution of warrant

Enforcement Agents (bailiffs) can evict anyone they find on the premises, including occupiers who were not named in the original possession proceedings.

Complaints about lender's conduct

The Financial Ombudsman Service can deal with complaints about mortgage lenders who do not treat the borrower fairly. It can deal with issues of insurance policies that have not paid out when they should have, or if it becomes apparent that the policy was mis-sold. 

Find out more about how to complain about a bank or lender on Shelter Legal.

Last updated: 8 March 2023

Footnotes

  • [1]

    Civil Procedure Rules SI 1998/3132 (as amended), Practice Direction 55.1.1 - 55.1.4 and 55.1.6.

  • [2]

    Civil Procedure Rules SI 1998/3132 (as amended). Practice Direction 55.2.1, 55.2.5, 55.5.1 and 55.5.2.

  • [3]

    Civil Procedure Rules SI 1998/3132 (as amended). Practice Direction 55b.6.3A - 55b.6.3C.

  • [4]

    r.15.5 Civil Procedure Rules.

  • [5]

    Civil Procedure Rules SI 1998/3132 (as amended), Practice Direction 55b.7.1.

  • [6]

    Rule 55.8(4) Civil Procedure Rules SI 1998/3132 (as amended).

  • [7]

    Rule 55.10(2) Civil Procedure Rules SI 1998/3132 (as amended).

  • [8]

    Rule 55.10(4) Civil Procedure Rules SI 1998/3132 (as amended).

  • [9]

    Civil Procedure Rules SI 1998/3132 (as amended), Practice Direction 55.2.5(1).

  • [10]

    r.55.5(3) Civil Procedure Rules.

  • [11]

    r.55.8(1)(b) Civil Procedure Rules.

  • [12]

    s.1 Mortgage Repossessions (Protection of Tenants etc) Act 2010 and Civil Procedure Rules, rule 55.10(4A).

  • [13]

    Co-Operative Bank plc v Phillips [2014

  • [14]

    r.83.2(3)(a) Civil Procedure Rules.

  • [15]

    r.83.8A Civil Procedure Rules.