Buying a Repossessed Property
Buying a repossessed property, also known as a foreclosed property, is often seen as a route to securing a bargain. The key attraction is speed: lenders seek a swift sale to recover debt, which can result in a competitive price.
However, this process is different from a standard purchase; there's more risk involved. The goal isn't just to buy it, but rather to buy it safely.
Repossession data in England & Wales
While numbers remain low compared to the 2009 peak (following the financial crisis), rising interest rates and the cost of living have driven a notable increase in recent years. The most recent data from Q1 and Q2 2025 for England & Wales shows:
Mortgage Repossessions (Homeowner and Buy-to-Let)
The total number of mortgaged properties taken into possession across England & Wales in the first half of 2025 was 4,160.
- This figure represents over a 30% year-on-year increase in Q1 2025 compared to the previous year.
- Despite the recent increase, the volume remains over 80% lower than the peak repossessions seen in 2009.
- The increase is primarily attributed to older, long-term arrears cases clearing the court system, alongside the sustained pressure of increased mortgage repayments due to higher interest rates.
Landlord Repossessions (Private and Social)
A total of 14,017 properties were repossessed in England & Wales in the first half of 2025 via the landlord possession process (eviction by court bailiffs).
- This volume is a result of continuing financial pressures on tenants struggling with rent inflation, and a surge in evictions as private landlords react to upcoming legislative changes.
- Landlords are increasingly seeking possession of properties before the implementation of the Renters' Rights Bill, which will abolish Section 21 ‘no fault’ evictions. This is driving a rush to market by some landlords selling their portfolios.
Sources: UK Finance, Ministry of Justice, GOV.uk.
The pros and cons of buying a repossessed property
A repossessed property purchase is a high-risk, high-speed transaction. The advantages centre on price and chain security, but the disadvantages primarily relate to disclosure and competition.
Pros | Cons |
|---|---|
Pros Potential Bargain
| Cons Sold "As Seen" (No Guarantee)
|
Pros No Property Chain
| Cons Critical Missing Information
|
Pros Fast Completion
| Cons High Gazumping Risk
|
Can I get a mortgage on a repossessed house?
Yes, but it can be harder and takes proactive work. Lenders may be hesitant if the property is in a very poor state of repair or deemed "uninhabitable" (e.g., missing a kitchen or bathroom).
They will likely require a full valuation survey to ensure their money is secure. To succeed, you must secure your Agreement in Principle (AIP) early and instruct a solicitor familiar with repossession timelines, like ours.
- Fixed, competitive legal fees with no hidden costs.
- Expert conveyancing solicitors with proven local knowledge.
- No Sale, No Fee protection for your transaction. Terms apply.
- On 99% of mortgage lender panels.
- Fast completions.
- We can solve any property challenge.
Legal challenge of 'Caveat Emptor'
The principle of 'Buyer Beware' (Caveat Emptor) governs all property sales in England & Wales, but its impact is amplified when dealing with a repossessed property.
What Caveat Emptor Means in Repossession
In a standard sale, the seller has a duty to disclose certain known issues.
When the seller is a lender, they have never lived in the property and are not legally required to make these disclosures. They sell with a limited title guarantee.
- The seller cannot answer basic questions about the property, such as previous works, neighbourhood disputes, or the location of boundaries.
- If you discover a defect (e.g., damp, poor wiring) after exchange of contracts, you have virtually no legal recourse against the lender/seller.
The Lender's Conflicting Duty
A second major legal factor is the lender’s duty to mitigate loss.
This means they have a statutory obligation to secure the best price possible for the property for the benefit of the former homeowner (the borrower).
This legal duty overrides any moral commitment to the initial buyer, resulting in two key risks:
- Gazumping: If a higher offer is received up until exchange, the lender must consider it and will likely accept it.
- Contractual Limitations: The lender's conveyancer will issue a strict contract, often with non-negotiable clauses that waive your rights to compensation for delays or if the sale falls through.
Your conveyancing solicitor's role here is to scrutinise these contracts and minimise the risk of financial loss before the exchange of contracts.
How to safely buy a repossessed property
A successful repossession purchase hinges on preparation and speed. The entire due diligence process must be completed within the lender’s tight deadline, often 28 days.
- 1
Instruct your Conveyancing Solicitor
Instruct a solicitor with experience in repossession sales before your offer is accepted. They must be ready to start immediately, as lenders' contracts are often non-negotiable and require immediate scrutiny.
Your solicitor's primary role is to ensure the seller (the lender) has the legal right to sell, to check the property’s title is clear, and to manage the strict deadlines and high risk of gazumping.
- 2
Get an Agreement in Principle or proof of cash funds
Lenders favour buyers who can move fastest. Having a Mortgage Agreement in Principle (AIP) or proof of cash funds ready is essential to prove you can meet the 14-to-28-day deadline.
If buying with a mortgage, your lender will likely require a full valuation and may be cautious if the property is in poor repair, which can cause delays.
- 3
Comission a survey
The property is sold 'as seen' with no guarantees. Do not rely on a basic mortgage valuation alone. You should commission a Level 3 (Full Structural) Survey after your offer is accepted.
This is not mandatory, but is your only chance to identify major defects (damp, subsidence, faulty electrics) that the seller cannot or will not disclose. Factor the potential cost of repairs into your maximum budget.
- 4
Complete property searches
Standard conveyancing searches (Local Authority, Water & Drainage, Environmental) must be ordered straight away. Since the seller provides little to no information, these searches are vital for revealing issues like planning proposals, road schemes, or contamination.
- 5
Be prepared to walk away
Given the high risk of gazumping and the non-negotiable 'as seen' condition, you must set a clear financial limit for the property and be prepared to withdraw if the lender accepts a higher offer or if the survey reveals catastrophic defects. Wasting survey/legal fees is better than inheriting a costly, unknown legal problem.
In our recent survey, 16% of homeowners found defects; including 2% who were able to pull out of a bad purchase, 7% who were able to negotiate a better price, and sadly, 7% of homeowners who did not get a survey and discovered defects after the purchase.
12 of the 39 who remembered how much these defects cost to remedy spent over £5,000
Don't burn your money, book a survey.
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
