You are here: Home - Better Business - Business Skills -

Delaying inevitable repossessions helps no-one – Spicer Haart

by: Dave Miller, client account manager at Spicerhaart corporate sales
  • 09/02/2018
  • 0
Delaying inevitable repossessions helps no-one – Spicer Haart
The government’s policy of forbearance, instigated with lenders at the time of the credit crunch, means lenders need to look at every possible solution with the borrower before taking action to repossess.

Even when the lender does finally take action it can sometimes be delayed by the court process so that the borrower ends up staying in the property for a number of years from when they first encountered financial difficulties.

Some repossessions can be delayed further by some lenders’ reluctance to repossess due to a potential perceived reputational impact or even customer vulnerability; but it doesn’t have to be like that.


Delaying the inevitable

If the property ultimately gets repossessed it is not good for either borrower or lender to drag it out for years.

For the borrower they have only delayed the inevitable, only they will now have incurred far greater debts than they would have done if the property had been repossessed more quickly.

At the same time the property is likely to have depreciated, as people in danger of repossession rarely spend time or money on maintaining their home.

This means that the property is worth less when it comes to sell, or it needs a lot of work done on it before the sale.

This is likely both to delay the sale and can mean the property sells for a lower price which will directly result in less money being returned to the borrower or their debts being higher.


Increased stress

Keeping someone in a property where repossession is clearly the ultimate outcome can be the wrong thing to do.

It can result in a stressful time for both borrower and lender with higher debts amounting.

Handled correctly it is possible to do things more quickly while finding the best outcome for the borrower.

Sitting down with the borrower face-to-face right at the beginning of the process and discussing their options is a great help.


Retain sale profit

Making sure that the borrower is aware of the repossession process and the outcomes is crucial – few borrowers realise that if their house is worth more at sale than the amount owed, then the additional money will be returned to them for example.

So many borrowers only realise this at the end of the process after their house has become dilapidated and they are potentially worse off as a result.

There are a number of options for people in arrears – repossession or sale are just two, but equity release is also an option for a growing number of older people, especially those with interest only mortgages who find they cannot pay off their outstanding balance.

If repossession is the only answer, putting off the inevitable is a solution that helps no-one.

There are 1 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Second charge lending up in 2017 – FLA

Data from the Finance and Leasing Association (FLA) showed second charge case numbers and lending value grew noticeably in 2017.