Repossession
A repossession is when a lender takes back a home after the mortgage is not repaid, then sells it to recover the debt. These sales appear in sold price data.
A repossession happens when a borrower falls behind on a mortgage and the lender takes possession of the home. The lender then sells it to repay what is owed.
Lenders usually need a court order to take possession of a home that someone lives in. Repossession is normally the last step, after other ways of clearing the arrears have been tried.
How a repossessed home is sold
The lender sells the home under what is called a power of sale. It has a duty to get the best price reasonably obtainable, so most repossessed homes are sold on the open market through an estate agent. Some are sold at a property auction.
If the sale raises more than the debt and the costs, the extra goes to the former owner. If it raises less, the former owner may still owe the shortfall.
Repossessions in sold price data
Repossession sales are recorded by HM Land Registry. They are classed as additional price paid entries, known as category B, together with identifiable buy-to-let sales and sales to companies. The data does not mark which category B sales were repossessions.
Each record still has the same details as any other sale: the price, the date of completion, the address, the property type and the tenure.
House Price Monitor includes these sales in its figures, because they are real sales at real prices. Our guide to what the Land Registry price data includes explains the categories.
Effect on local prices
A repossessed home may sell for less than similar homes nearby, for example because it needs work or because it is sold quickly. In most areas repossessions are a small share of sales.
Because House Price Monitor uses the median price, one low sale does not move the typical price far. Our guide to average and median house prices explains why.
| Who sells | The lender, under a power of sale |
| Usual route | Estate agent or property auction |
| In Price Paid Data | Category B (additional price paid) |
| Marked separately | No |
Related terms
Additional price paid data · Price Paid Data · Property auction · Median price · Buy-to-let