Those of you that remember the early 1990’s may remember the high level of home repossessions that took place across the country, when between 1990 and 1993 the slump in house prices and a rise in unemployment meant that 247,000 homes were repossessed.
What you may not realise that during 2008 the number of mortgage repossessions in England and Wales reached 40,000 properties repossessed, this equates to 1 in 290 mortgages and is forecast to increase throughout 2009.
Can my home be repossessed ?
If you are behind on rent or mortgage payments and have not come to an agreement to repay the arrears, the landlord or mortgage company can start possession action in the county court to take back the property.
The landlord / lender will first issue a claim form which will include a date and time for you to attend a hearing at your local county court.
It is very important that you attend the hearing, even if you have replied to the claim form. This is your opportunity to put your payment proposal before a district judge. The hearing will take place in a private room and only you, the district judge and the solicitor for the landlord/lender will be present. If the district judge believes your offer is reasonable they are likely to grant a suspended possession order. That in effect allows you stay in your home providing you continue to pay the ongoing rent/mortgage plus the agreed amount towards your arrears every month as you have suggested.
However, it is important to remember that if you fail to comply to the terms of the suspended possession order the lender can apply for an “Eviction Warrant” without needing any further court action. When an eviction warrant is in force the court bailiffs will set a date when they will go round to the property to ensure that the property is empty.
If the court does not believe you can realistically afford to clear the arrears they will probably make a possession order, usually effective in 28 days.
For more advice and information regarding repossession orders, visit the Citizens Advice website.
What can I do ?
There are several options, the first and most obvious (but not necessarily the easiest) is to ensure that you pay the rent/mortgage on time and in full each month. If you are having problems paying the mortgage it may be worth talking to the lender before you get seriously into arrears, they may be able to make suggestions about reducing payments by extending the loan period or switching to another form of mortgage.
A second option is to re-mortgage or take out a secured loan using the house as security on the loan – although if you are having difficulties paying an existing mortgage you should think carefully before taking out an additional loan (are you just putting off the inevitable?).
UK Home Information is not registered to provide any financial advice, this page has been provided as a general guide to house repossessions. You should always contact a professional advisor before taking out any action that may involve financing or stopping repossession of your home.