House repossession happens when a mortgage lender or a secured loan provider takes ownership of the property.
This happens if you regularly fail to make mortgage or loan payments and you fall into arrears. They then sell on the house to cover the cost of the outstanding loan.
It is a legal process which lenders use only as a last resort and must be agreed by a court of law before house repossession can take place.
You may also be at risk of having your house repossessed if a bankruptcy order is made against you, a compulsory purchase order is made against your property or you don’t pay ground rent or service charges to your freeholder or break the conditions of your lease.
If your house is being repossessed you will be evicted from the property and the lender will take ownership of your property. They will then sell the property to pay off the debts you owe.
Often the house is sold for less than its market value so the proceeds may not cover all the debts you owe. You will be responsible for covering this shortfall.
You may also be responsible for paying the mortgage and other bills until the property is sold, even though you no longer own it.
You can read more about house repossession on Shelter’s website.
