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Debt, repossession and property

It is commonly understood that if you fail to keep up with your mortgage payments your home is at risk of repossession.  For more information about how to stop a mortgage repossession please read this article.  What is less well understood is that if you borrow funds via an unsecured loan you can face the same risk.  Typical forms of unsecured lending are credit cards and personal loan agreements.

So how can an unsecured debt lead to the repossession of a property?

Lenders are not stupid.  When they agree to provide some form of unsecured lending they will mainly base their decision on your income level.  However, they will also carry out credit checks and find out if you own a property.  This information will make it easier to approve your loan and may even influence the amount they are prepared to lend.

If you subsequently fail to make your loan repayments the lender may apply to the courts to obtain a county court judgment (CCJ).  Once they have a CCJ they can then apply for what is known as a charging order.  The charging order can be registered as a secured debt on your property.  And hey presto that is how an unsecured loan turns into a secured loan.

In most cases the lender will not seek to force the sale of the property to recover this newly secured debt.  This is because the debt, being an unsecured loan initially, is relatively small compared with mortgage debt.  It is not cost efficient to repossess property for small sums of money.  Interestingly, the lender can also charge interest on the outstanding loan amount.  At the current prevailing interest rate of 8% this represents a healthy return.  Conceivably this could even have a bearing on the lenders desire to repossess.  However, if the lender decides to recover their debt they can apply for an “order for sale”.  If the order for sale is granted they can repossess the property.

After Repossession of a Property

Be aware that once a property is repossessed your debts do not stop accruing.  The lender will continue to charge interest until the property is sold.  If the sale of the property is not sufficient to cover the outstanding debt you have what is called a “mortgage shortfall”.  You remain responsible for any mortgage shortfall.  The lender can pursue you for up to 12 years to recover the mortgage shortfall.


If you are in a situation that is beginning to resemble the above scenario then call us or simply enter your postcode and complete your details.  We will contact you immediately to see if we can help.  If we are not in a position to help we will do our best to advise you.

How to deal with a property when you experience sudden debt

Connect four showing red and green coins representing debt and surplus

Life doesn’t always turn out in the way you’d expected and even the best laid plans can come undone. Where sudden, unexpected debt is concerned, it’s likely to affect all areas of your life, from lifestyle habits and food shopping, to more important factors such as your car and property. Here’s an insight into some of the ways you can deal with your property if you suddenly experience debt, along with the pros and cons of each.

Letting out a room in your property

If you’ve got one or more spare rooms in your property – perhaps due to your kids leaving home, or a guest room that’s not in use – then one option to help with a debt problem is to let out a room in your home.

This can help bring in some extra cash each month and, if you let a room on a long-term basis, you will know how much extra you’ll be earning each month. If you use the Rent a Room scheme you could earn up to £7500 per year tax free.

Taking in a lodger isn’t for everyone and it can change the dynamics and feel of life in your home, especially where you need to share some rooms, such a bathroom or kitchen. Also, this won’t provide an instant lump-sum and it will depend on how in debt you are as to how viable it proves to be.

Letting out your whole property to ease your debt

If it’s only you in your home and you don’t need all the extra space anymore, then you could consider renting out the whole of your property. It will of course mean you’ll need to move out, but if you’ve got friends or relatives who’ll put you up for free, it can be a viable option.

Your property could be let furnished with your furniture in situ or unfurnished. A furnished property could potentially earn you more than an unfurnished one, depending on its location and the type of tenants you’re aiming for. You’ll also not have to worry about spending out on furnishing it or buying appliances as yours will already be there.

Unfurnished properties have their benefits too, and are more likely to appeal to families who already have their own furniture or want a long-term let that they can personalise with their own belongings.

On the downside, you might worry about becoming a landlord, having to deal with repairs and finding tenants and the potential wear and tear costs involved. And if you haven’t got anywhere else to stay rent-free, it might not be cost effective.

Selling your property through an estate agent

If the level of your debt means that you’ll need to sell your house in order to cope with it and clear debts, then you can sell it conventionally through an estate agent.

The average property sale takes at least two to three months, although it could end up being a lot longer if you end up in part of a property buying chain.

Of course, there’s no guarantee that it will be a quick process or even sell. Although you may be quoted a positive sounding figure, and your house may go up for sale at that price to start with, with many buyers providing offers, there’s no guarantee you’ll get exactly the price you’re looking for.

Sell your property quickly for cash

If your debt problem is very pressing and you really need to earn extra cash as soon as possible, then a quick and convenient option is to sell your property quickly for cash.

It can be hard to find a cash buyer immediately if you’re trying to sell through an estate agent, but by using a specialist company that buys houses for cash, you can free up your debt quickly. If your property meets the criteria (for example, it’s in the geographical area that the quick sale company specialise in), you could receive an offer to purchase your property with 24 hours of it being viewed.

One small downside is that you might not get as much for your property as you could have if you waited around for an offer via an estate agent, but when debt is concerned, sometimes you just don’t have time to wait for ‘what might’ happen.

Your Guide to Selling a Home Fast in London

Selling a Home fast in London

After a long and protracted recession, it seems that if we have finally turned the corner. Many analysts now predict that 2016 will be an excellent year in terms of this financial recovery. However, this can actually present some very real problems for those who are looking for a quick London house sale. Whether due to outstanding debt or a relocation, the fact of the matter is that this can be a bit of a complicated process. Let’s take a look at a few steps to make sure that this move is performed efficiently.

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Quick House Sale Company: good practice in the industry

Quick house sale companies do have a place in the market. Perhaps you have just learned that you owe a massive amount in back taxes. You may not be able to afford mandatory major works that will soon be carried out or you could simply wish to liquidate the estate of a recently departed family member. These are a few examples of when a quick house sale company is advantageous. What are some of the positive attributes of these firms and which policies should be avoided?

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Cool Markets Lead to Rising Winter Home Prices: Quick London Property Sale

Some property owners will be happy to learn that the risks of a bursting housing bubble are seen by many analysts to be highly overstated. This could be great news for those who are casually looking to sell their home and are not in a rush for cash. However, this very same scenario (believe it or not) may very well represent a further burden upon the shoulders of those who are selling a home in London on short notice. Although this may seem counter-intuitive, let’s look at why such an observation may turn out to be true.

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Quick House Sale Companies – good or bad?

There are many families and individuals that may be looking for a quick house sale in London. A professional property buying company will provide you with such a service and allow you to liquidate your property asset in a quick and efficient manner. Typically, they will offer to buy the property at between 70-80% of the true market value of the property in return for the service they provide.  Unfortunately, all that glitters is certainly not gold in terms of quick house sale companies. Let’s take a look at some of the worst practices to avoid as well as a handful of tips to select the right agency.

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Sell a Home Fast in London: Cash for London Property

Debt is a four-letter word which is difficult for most individuals to hear. However, it is also a part of life. One of the most startling recent figures highlights this immutable fact. The 35-44 age group throughout the United Kingdom holds the burden of property debt; a massive £266 billion pounds.

However, it is also a fact that other forms of debt are likewise just as rampant. Whether referring to unpaid mortgages, credit card mistakes or simply an individual that has been out of work for an extended period of time, lenders are hardly flexible. There are naturally times when one will desire to sell a home fast in London for these very same reasons. This can nonetheless be a daunting proposition.

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Facing repossession? Don’t stick your head in the sand.

With interest rates static at 5%, living costs and fuel prices rocketing increasing numbers of people are struggling to keep pace with mortgage payments, and other debts secured on property.

The Ministry of Justice said 28,658 house repossession orders were made by the courts in England and Wales in the second quarter of 2008. This was up 24% on the same period in 2007 and 4% higher than the first quarter of 2008. Records show that 1.5 million people have current mortgage deals which are about to expire.

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The sale of my property was well managed with regular communication and advice and support provided throughout the process.  The company also provided legal support through one of their panel solicitors which was professional friendly and reassuring during what was a complex sale.  They are trustworthy and reliable and I would recommend this company to anyone looking to sell their property.  Thank you for making this a much easier process.
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