How Long Does It Take for a Home to be Repossessed in the UK?
Repossession is something we’ve all heard of, and would never wish upon anybody. Surprisingly, however, home repossession in the UK is fairly common, and happens due to miss payments and unpaid debts.
Today, we’re going to be covering all bases regarding repossession, and how long it takes for a home to be officially repossessed in the UK.
What Does it Really Mean to Have Your Home Repossessed?
Before delving into the what’s, why’s and when’s, it makes sense to cover what it really means to have your home repossessed.
- Quite literally, the word “repossession” refers to taking something back. Therefore, home repossession would mean someone taking your home back.
- Although you own the property to an extent, it’s through a mortgage company, and therefore it’s them or the bank who will “take back” your home if it ends up being repossessed.
- Therefore, home repossession is very simply the mortgage company or bank taking back a property that the homeowner can no longer pay for, or owes money on.
Very basically, that’s the definition of home repossession.
What is the Initial Process of Home Repossession?
Home repossession takes place in a number of stages, and the time frame isn’t the same for everybody.
- Luckily for the homeowner, the vast majority of the time there are steps that can be taken at each stage in order to either prolong or eliminate the possibility of repossession actually taking place.
- The main reason that a lender, bank or mortgage company will want to start repossession proceedings, is usually that there have been some sort of issues with your mortgage payments.
- This usually means either missed or late payments.
- The vast majority of people will have their mortgage taken from their bank accounts on a direct debit every month. However, if you don’t have the funds in your bank, then the transaction will bounce back, and your lender will be notified that the funds could not be taken from your account.
- This means that the bank will have rejected the direct debit, for the reason of your account having “insufficient funds”.
- However, it might be the case that you’ve even cancelled your direct debit for your mortgage due to knowing you’re unlikely to be able to afford it.
- The same thing will happen, in that when the bank request the funds, they’ll be rejected.
- Following this, your lender is likely to get in touch with you – and the longer you ignore them, the worse it’ll get.
The next stage will mostly depend upon your communication with your lender.
So What Happens if I Communicate with My Lender?
So is it really possible to stop the process of repossession taking place, simply by maintaining communication with your lender?
- You can prevent initial action being taken by your lender if you communicate with them, but it’s always dependant on circumstance.
- Even if it’s the case that you can’t prevent repossession forever, you might be able to elongate the process and therefore make it easier for yourself in the long run.
- Taking action – namely speaking to your lender – could however change the entire outcome of the situation. The worst thing that you can possibly do is bury your head in the sand, and ignore your lender.
- If you do choose to ignore your lender – which is likely to get their back up and make them less trusting of you – the repossession order could be made and the process complete in as little as five or six months. That includes the action of you being ordered to leave your home.
- However, if you do choose to do the right thing and communicate with your lender, even if you can’t prevent the inevitable entirely, you might be able to prolong the overall process, so that it takes twelve months or so. This gives you a lot more time to get back on your feet and sort out your living situation.
When does the Court System get Involved?
If the repossession process begins, then it’s inevitable that at some point your case will be taken through the court system.
- Unlike the initial stage where talking to your lender can slow down the overall process, once your case is taken to court, it’s entirely dependant on the system how long it’ll take to go through.
- In the UK, however, due to government cuts to public funding, sometimes the court case can take a while to go through. This, however, isn’t something to rely on because it’s entirely dependant on the area or region in the UK.
- The law usually goes that once you stand before the judge and the decision is made, if that happens to be a repossession order, then you’re likely to be ordered to leave your house in as little as between twenty eight and fifty six days. This is from the date of the court hearing.
However, it’s impossible to generalise “repossession” under one category. There are many different stages to repossession, and dependant on how you act upon each of these stages, the time frame can differ greatly.
What is the Official First Stage of Home Repossession in the UK?
We’ve touched a little upon what the initial stages of home repossession are in the UK, and how the court orders work – but what are the actual stages of repossession? Well, there are seven official stages of repossession, and there’s usually something you can do at each stage in order to prolong or stop the process. We’re going to start right at the beginning.
- The first stage of home repossession, as we’ve already stated, happens if you miss a mortgage payment. This is known as taking you into mortgage arrears.
- After this has happened, there are certain terms and conditions that your lender has to follow in order to take the next step. At this stage, there’s no need to panic, as your lender has to behave and handle the situation in a certain way.
- The initial action taken by the lender, should always be to write to you or contact you in some form. In doing this, they should highlight what the problem is with your payment, and then will be likely to ask you to acknowledge and sort it out.
- As far as they’re concerned, at this stage the missed payment could be a simple mistake on your part that can be easily solved, so they’ll ask you to look into the reason behind the missed payment, or words to that sort of effect.
- If it is the case that there’s just been an error on your payment – then that’s easy! Simply respond to the lender that there’s been an error, and you’ll amend it ASAP.
- However, if this isn’t the case, then the most important advice we could ever give you is never to ignore your lender. Unfortunately, this is what the vast majority of people in mortgage arrears tend to do, because they feel that if they just bury their heads in the sand, the issue will go away. The truth is, it’ll only get worse.
- Taking action in these early stages is the best way to react – so as soon as you receive a letter or know you’ve missed the payment, speak to your lender, as we’ve mentioned above!
- If they know you’re willing to work things out with them, then they’re less likely to try and forcefully take things to the next level.
- Speak with your lender about your options, and whether or not you can come up with a payment plan that works for both of you.
- Once you’ve responded in one way or another, then your lender should take a look at what you’ve proposed, and consider it. They’ll then get in touch with you.
- Usually, your lender’s response will be something along the lines of the following. They’ll say that if you don’t respond – assuming you haven’t – or that they’re not happy with whatever it is you’re proposing, then they’ll have no choice but to take court action.
- Remember, that your lender doesn’t necessarily want to repossess your home – it’s just as much in their interest for you to make up the payments as it is in yours!
- Because of this, it’s possible to try negotiating further with your lender at this stage too. If they reject what you’re suggesting, then you could always put forward a counter proposal.
If all of the above fails, then the repossession process will move onto the next stage.
What is the Second Stage of Home Repossession in the UK?
Which leads us onto the second stage of home repossession, but what is it?
- If all of the above has failed, then your lender’s next step will to be to get in contact with the court.
- When they do this, they’ll request a repossession order. A court order is a necessity for your lender if they want to repossess your property.
- The repossession order application process must include details of why the court should order for a repossession of you home.
- Some of these details will include things such as your home address, missed payments and so on.
- Following this, the court will write to you and notify you of what the next stage will be.
What is the Third Stage of Home Repossession in the UK?
The latter part of the second stage involved the court writing to you and notifying you of what happens next, so what does happen next?
- After the repossession application has been received by the court, they’ll write to you notifying you of the date of your court hearing.
- The court hearing is where the official decision will be made by the judge on whether or not you get to keep your home, so it should be taken seriously.
- Your letter from the court will include things such as the time and date of the court hearing, the reasons behind the lender wanting to repossess your home in the first place, and a defence form which you should fill out and return to the court.
- As well as the letter including all of this information, you’ll receive a copy of your mortgage lender’s claim form.
- Again at this stage, DO NOT ignore this letter from the court.
- If you do ignore the letter, then rather than the hearing taking place they’ll continue to proceed through the repossession process anyway. This will result in repossession. Remember that they’re always a chance of prevention, but only if you respond and communicate accordingly.
- At this stage, presuming you haven’t already done so, you should start looking into seeking professional advice.
- Asking a professional for advice will help you to prepare accordingly for your hearing, and know what to expect.
- At this stage, it’s still a possibility that you could negotiate with your lender. It’s late, but it’s not set in stone yet.
- A professional adviser will be able to help you build your own case by gathering evidence and so on. They could even step in and aid you in negotiating with either your lender or their representative.
- Remember, that professionals have done this before. They know the system and the process back to front, so are likely to give you the best possible chance of keeping your home, even at this late stage.
Following this, the court case is likely to take place.
What is the Fourth Stage of Home Repossession in the UK?
After the third stage where details of the court case are sent to you, the court case will go forward.
- You do have the choice whether or not to attend your own court case, but we would strongly recommend attending.
- The court hearing will go forwards whether you choose to attend or not, but you give yourself the best chance possible if you do go.
- You don’t even have to be represented to attend.
- When it comes to your repossession case, the court and judge will hear your side of the story.
- Whoever the judge is at the time of the hearing will be the one to make the end decision on whether or not the repossession should take place. They will make this decision based upon what he reads and hears from both yourself and your lender, or alternatively your representatives.
- There are several different outcomes that can come from the court case. We’re going to cover all of these.
- The first outcome we’re going to talk about, is if the judge decides that your home should be repossessed. If this is the outcome, then the mortgage lender has the right to evict you and your family, co-habitants or whoever you live with from the property. The lender is then likely to sell your home on in order to make up for the missed mortgage payments.
- The second outcome of the case could be a suspended possession order. This very basically means that the judge has decided to give you a second chance of keeping your home – under certain terms and conditions. Yes, you can stay in your home for longer which is a far better scenario than the previous, but you will have to follow certain rules in order to make this work. A prime example of these conditions would be having to pay your mortgage arrears and payments at a monthly set amount.
- The third outcome, is that the case could be adjourned by the judge. The case being adjourned simply prolongs the process, as it means the case will be postponed until another date at a later time. A reason for this could be that your lender has to do certain things before taking the case back to court.
- The fourth outcome, and by far the most unlikely, is that the case will be dismissed altogether by the judge. This would only happen if correct procedures hadn’t been followed by the lender, for example, so is very unlikely. It can happen, it’s just rare.
What is the Fifth Stage of Home Repossession in the UK?
Say that in stage four, the judge comes to the conclusion that your home should be repossessed. It’s important you know what comes next.
- Following the decision that your home should be repossessed; you will then receive a date by which you have to leave your home.
- Alongside the repossession order, it’s likely that the judge could rule that you have to pay the court costs.
- As well as this, your lender will require you to pay your mortgage arrears, and could very possibly add their legal costs onto this bill as well.
- Generally speaking you’re given a minimum of twenty eight days in order to leave your property. In some cases, dependant on the court, you may be allowed up to fifty six days, however it’s best to be prepared for a worst case scenario.
- By this point, you should have started considering your options of where to live etc.
Believe it or not, if you act extremely quickly and contact the right people, you could prolong or even stop the process at this stage. This is unlikely and rare, but it’s not over until it’s over. Remember that.
What is the Sixth Stage of Home Repossession in the UK?
If there is nothing that you can do and the repossession is going forward, then this is what is likely to come next.
- Regardless of what the time frame you are given is, you must leave your home by the time it’s up. It doesn’t matter whether it’s the standard twenty eight or the more generous fifty six – you have to be out before your numbers are up.
- However, sometimes people whose homes have been repossessed still refuse to leave the property, even at this late stage.
- If you do refuse to leave your home after your time is up, then it’s likely that bailiffs will be sent in to remove you by force.
- As well as the bailiffs, you can expect the police to make an appearance to. This is usually in order to ensure everything is under control, and nothing turns violent.
- If you were given a suspended position order in court, and you don’t obey the terms and conditions of your contract – such as not making payments – then it’s a possibility that bailiffs and police could become involved too.
- In order for bailiffs to become involved, the court must be contacted by your lender. They will apply for a bailiff’s warrant from the court.
- If this warrant is rejected or isn’t applied for, then by law bailiffs do not have the right to forcibly remove you from your home, regardless of whether or not the lender was granted a repossession order in court.
- If you do choose to stay in your property past the date that you’re given at your repossession hearing, then it’s likely that it won’t be long before your lender will be apply for – and be granted – a bailiff warrant.
- You might expect that bailiffs would turn up without notice, but this isn’t actually the case.
- Before bailiffs show up at your home, they must write first and give you a time and date of when they’ll arrive to repossess your home.
- Although they repossess by force in a sense, there are rules and regulations that they must follow. For example, they can’t use physical violence, become aggressive, or use threatening language.
- However, if you do refuse to leave your home despite their asking, then they will be likely to get the police involved.
- Once the police turn up, you’re out of options. It’s illegal for you to be there without permission as it’s no longer your home technically.
- Even if you have children, you will be forced to leave once the police are involved.
If you have outstanding mortgage, loan, or legal payments then the fees of the bailiffs will also be added onto this.
What is the Seventh, and Final, Stage of Home Repossession in the UK?
Finally, we’ve come to the seventh stage of home repossession. Your home has now been repossessed by the lender, so what comes next?
- Now that your home has been repossessed by the lender, it becomes their property.
- The lender will then go on to sell your home.
- Usually when a property has been repossessed, it’s likely to be sold for under the market value. This isn’t great news for the lender, as they want to be able to pay as much of the mortgage off as is possible – and the lower the price it sells for, the less likely this becomes.
- If there’s difficulty in selling your property, then it’s bad news for you too, as until it’s actually sold by the lender, you are considered to be responsible for paying any interest on the outstanding costs – on top of anything you owe for bailiffs, legal fees and arrears.
- The good news is, however, that if there does happen to be money left over from the sale of your home, then this money will be returned to you by your lender.
The bad news is, that if it goes the other way and there is a gap between what you owe and the amount the property sells for, then there is what is referred to as a mortgage shortfall. You then potentially become responsible for paying the cost of the shortfall to the lender.
How Can I Avoid Repossession Altogether?
So, we’ve gone through the stages of repossession. Now we’re going to cover the steps you can take in order to avoid it altogether:
- The first step, as we’ve stressed over a over again, is to communicate with your lender. DO NOT IGNORE THEM! The longer you choose to ignore them, the faster and more certain a repossession order becomes. Yes, they have to contact you first, but if you ignore them then you leave them with no choice but to take things further.
- Remember, that it’s not in the lender’s interest to repossess your home, and they don’t want to do it. It only comes into the equation if you leave them with no other option.
- It’s a horrible situation – and one that none of us ever want to be in – but it’s also incredibly serious, meaning you should be doing everything within your power to stop it.
- Remember, that there is help out there. Organisations such as Citizens Advice and Shelter can provide you with the relevant advice and information in order to help you to keep your home. It might even be the case that you’re entitled to legal aid, or even that you can get help with your mortgage payments if you’re on certain benefits.
It’s not over until it’s over, so exhaust your options, and fight to keep your home. Work together with your lender, and try to come to a solution.
If My Home is Repossessed, What Happens Afterwards?
Finally, we’ve talked in depth about what repossession is. We’ve gone through what the seven stages of repossession are, what they include, and how you can go about stopping them from taking place.
However, one thing that is rarely discussed, is what happens after the repossession? It’s no secret that life is likely to dramatically change following the repossession of your home, but what can you really expect to come next, and how will it impact you in the future?
- It might sound like stating the obvious, but it’s going to be hard. The process of repossession on the whole can be extremely taxing physically, financially, and especially emotionally. You may even feel like you’ve had your life in its entirety ripped away from you, and that you no longer have any security. If you are really struggling with the psychological repercussions, then we would urge you to seek help.
- However, remember that your life isn’t over. You can always start over, no matter how tough it might seem.
- The first obstacle, is undoubtedly, finding a place to live.
- The good news is, that your local council are likely to help you to find a place to live, and if you’re considered as “homeless” then you go down as a priority case.
- Likewise, if you have children or other dependants who rely on you for security, you’re also going to be considered a priority case, and are therefore likely to be rehomed quicker than a single adult with no dependants, for example.
- Again – the more you communicate, the better chance you have. Don’t wait until things are desperate in order to inform your council that you have nowhere to live. Inform them that you’re facing repossession, and they’re far more likely to be able to find you somewhere to live more quickly.
- In regards to credit rating and reports, this will of course be negatively affected by the fact your home was repossessed.
- For example, if you apply for a loan or to borrow money in any capacity again, then you’re less likely to be accepted.
- Furthermore, in the initial stages following the repossession, you might find it difficult to be accepted on renting a property too.
- If the situation has escalated to the point of bailiffs and police becoming involved, and payments being unable to be made, then chances are you’ll have lost a lot of possessions along with your home too. There are charities out there who will help with this specifically, so look into contacting them.
- The good news is, that it doesn’t last forever. If you work to improve your credit score and financial situation, then in seven or eight years, the repossession should stop following you around and impacting you as greatly as it had done initially.
It’s one of the most horrifically difficult things that can happen to a person, but please remember that repossession – even if it goes to completion – is not the end.
Always remember to communicate. Negotiate with your lender in those early days, and reach out for help should you need to in the latter ones. All hope isn’t gone the minute you miss a payment, and the quicker you act, the better the situation will be for you.
We hope that this article has been helpful.