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What happens to the house after the repossession?

After your lender has repossessed your home and you have moved out, your lender will sell your property in order to recover the money that is owed to them. You will still have responsibilities for the home until it is sold.

Do I still have to make mortgage payments after my home has been repossessed?

No. But interest on the amount owed for your home will continue to be charged until a new owner buys the property. This will be deducted from the proceeds of selling the home.

Who is responsible for maintenance and repairs?

Until your lender sells the property, you will still be responsible for repairs and maintenance. The lender can arrange for any essential work to be carried out (for example, mending broken windows or cutting the grass) and deduct any cost from the proceeds of selling the property.

If you feel that you have been charged too much, you can make a complaint (see 'what if I'm not happy with the way the lender has acted' below).

Do I have to keep paying my insurance?

You are responsible for insuring the property until it is sold to a new owner. Your insurance may not be valid if there is no-one living in the property and you may have to arrange temporary insurance.

Do I still have to pay the council tax?

If your home has been repossessed, you stop being liable for the council tax on the day you move out. The property will be exempt from council tax until the new owner moves in.

Does my lender have to wait for a good offer before selling the property?

Your lender is supposed to sell your home for the best possible price. However, a sale by your lender is likely to fetch a lower price than if you sold it yourself.

What happens to the proceeds of the sale?

Once the property is sold, the proceeds will be divided up:

  • your lender will take the sum of money owed (the amount remaining on mortgage, arrears and interest due)
  • your lender will recover their legal costs
  • your lender will get back the cost of selling the home
  • any other loans secured on the property will be paid off.

If there is any money left, this is rightfully yours. You should be told in writing how the money has been divided up.

What happens if there is not enough money to clear the debt?

If there is not enough money to cover all of the above costs, your lender can pursue you for the shortfall.

What if I'm not happy with the way the lender has acted?

If you feel that your lender has been unhelpful or treated you unfairly, you can make a complaint to the Financial Ombudsman.

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The important points

  • Once your home has been repossessed and you have been evicted, you don't have to make mortgage payments, but interest will be charged on the remaining debt until the property is sold.
  • You still have to insure the property until it is sold but you are not liable for the council tax after you move out.
  • You are responsible for any repairs and maintenance until the property is sold, and the lender can arrange for any essential work to be done. They can deduct the cost of this from the proceeds of the sale.
  • If there is not enough money from the sale to cover the debt and post-repossession costs, the lender can pursue the you for the difference.

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