Repossessed Houses For Sale

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Repossessed houses for sale in the UK are an excellent way of saving money on a property purchase.
Repossessed houses for sale in the UK come in all shapes and sizes, and may include both older and newer homes. Photo © Hugh Venables (cc-by-sa/2.0).

UK Repossessed Houses For Sale

Repossessed houses for sale in the UK are one way that buyers can potentially save a substantial amount of money when purchasing a property.

In some cases repossessed houses can sell for as much as 40% less than the normal market value. Clearly, this presents an excellent opportunity for buyers.

However, although repossessed properties can represent an excellent way to buy a cheap property, things don’t always take that course when the house is actually sold.

In this guide we’ll explain how to get started with bank repossessions, what to look out for and the course of action to take in order to find the best repossessed houses for sale in the UK.

Photo of a newer repossessed house for sale near Oxford.
Not all repossessed houses for sale are older properties. Photo © Des Blenkinsopp (cc-by-sa/2.0)

Repossessed Houses Can Be Any Type, Age Or Condition

There is a general misconception that repossessed houses for sale in the UK are usually run-down houses or properties in a terrible state of repair, but this is not the case.

While some derelict property for sale may be foreclosed properties, the reality is that any house which has been secured on a debt is susceptible to repossession if there is a major default.

This can sometimes include recently built properties and, more often than not, is due to over-commitment by the original buyer or when they have simply let things go past the point of no return with their bank.

There is also no restriction on the property types when it comes to repossessed homes, so this opens up a lot of possibilities regardless of the kind of property. This could mean everything from cottages for sale in Scotland to more rural repossessed smallholdings for sale in Wales.

When it comes to saving big on the actual value of a property, the largest discounts are more likely to be on older homes, especially if they are in bad condition. However, factors like location and the amount of interested buyers can affect the price dramatically.

Photo showing bank repossessed homes in the UK.
The price repossessed houses sell for largely depends on the level of competition at auction. Photo © Des Blenkinsopp (cc-by-sa/2.0).

How To Find Repossessed Houses For Sale

A great number of repossessed houses for sale are seldom advertised as such. Most banks and mortgage companies will want to disguise the fact that they want to get rid of a repossessed property simply because they do not want to devalue their brand.

Property repossessions can sometimes be called “Below Market Value Properties” and are sold in various ways.

Most properties classed as below market value, that were owner occupied by individuals, are sold through estate agents who are usually advised not to tell the buyers that it is a repossessed property. However, if asked directly an estate agent must let the buyer know the exact state of play.

Many repossessed homes the UK have boarded up windows and some will have a repossession notice attached to the door, but rather than looking for individual properties yourself, there are some practical steps you can take to increase your chances of finding a suitable foreclosed property:

  • Narrow down your property search area: To start with, narrow down the part of the country you are specifically interested in. This will help you find properties of interest much faster.
  • Register with local property auction houses: If you register with a local property auction house and let them know you are interested in repossessed properties, they will contact you when suitable lots are due to appear at future auctions.
  • Talk to local estate agents: Again, let local estate agents know exactly what you are looking for. As a potential buyer, they will be keen to contact you if any repossessed homes appear on their books.
  • Contact banks in the area: There is no harm in sending an email to banks in the area asking them if they have any repossessed houses for sale. They may be able to advise you which agent, auction house or entity they use to dispose of their foreclosed properties.
Type Of Repossessed PropertyBelow Market Value Discount
Detached Houses30%
Semi-Detached Houses25%
Terraced Houses20%
Flats and Apartments25%
Farm Houses30%
These figures are UK averages and are intended for general guidance. Location, property condition and local competition will affect the amount of discount one could expect.
Photo showing a repossessed house for sale which has been boarded up.
Repossessed properties can present excellent opportunities for buyers who wish to tackle a renovation project. Photo © Richard Sutcliffe (cc-by-sa/2.0).

Help With Repossession:
Citizens Advice Bureau
UK Government advice on repossession

Are Repossessed Houses Cheaper?

Lenders who have taken over properties are legally obliged to get the best possible price for the property sale.

If the previous owner has some equity in the property the lender must try to sell as high as possible but rarely will they do any work to make the property more attractive to buy.

In reality, a general figure of 30% below market value is common for UK repossessed houses for sale and, if the institution is able to recover all or most of their funds, they are likely to proceed with the sale.

You should also factor in re-connection of services and the costs of renovation work.

Photo of a repossessed house in the countryside in need of renovation.
If you find a repossessed house for sale which required renovation you must factor these costs into your budget. Photo © Neil Theasby (cc-by-sa/2.0)

Get A Survey Done On Any Repossessed Houses For Sale

Getting a professional survey on any repossessed houses you intend to bid on is as essential as with any other property purchase. The seller (lender) will not be able to provide crucial information about alterations or structural problems.

It is possible that there are hidden defects such as problems with rising damp and these may have prevented the previous owner from selling. A full building survey will reveal if there are any serious problems.

Be sure you carry out all necessary checks before you purchase a repossessed property, such as required survey, access and establishing the correct title of the property.

How do I buy a repossessed property?

To buy a repossessed property for sale, your first step is to locate a property being sold. Talk to local estate agents, register with local auction houses and monitor local newspapers for repossession notices. You ca then bid on the property when the sale occurs.

Where do banks sell repossessed houses?

Banks usually sell houses they have repossessed via local estate agents or property auction houses in the immediate area or the nearest town.

What happens when a house is repossessed?

When a house is repossessed by a lender, their priority will be to sell the property in order to recover any funds. Normally the seller is obligated to get the best possible price for the property.

Can you stop a house repossession?

It may be possible to stop a house repossession by paying off the debts secured on the property. most lenders will pull the sale from the market if you are able to clear the commitments. Once a house has been sold to a buyer it is not possible to stop a repossession.

Is buying a repossessed house for sale a good idea?

Buying a repossessed property is no different than buying any other kind of property, but the circumstances of sale may be slightly different. For example, the house may be sold via a property auction as opposed to the normal methods of using an estate agent.

Photo of two repossessed houses for sale which are part of a former hospital building.
The sale of repossessed houses can be withdrawn if the former owner is able to clear any commitments. Photo © M J Richardson (cc-by-sa/2.0)

Making An Offer On A Repossessed House

Unlike the normal process of house purchase, making an offer on a repossessed property does not automatically mean that it will be accepted.

The seller must place a ‘Notice of Offer’ in local newspapers allowing a period of seven days for other offers to come in. The lender will want the maximum amount possible from the sale so there is always the risk of someone else entering the bidding at the last minute with a higher offer.

The sale of a repossessed property can also fall through if the original owner is able to pay off the debts which are secured on the property.

An example of this is the story of a couple from Wales who were actively looking for cheap rural property for sale in Scotland. After much searching over many months, they finally found a repossession property being sold at around 40% less than the market value.

Photo of a bank repossessed house for sale in Scotland which was pulled from the market.
The couple were confident their offer on the repossessed house would be accepted. Photo © M J Richardson (cc-by-sa/2.0)

As the house was in Scotland, it was subject to the “offers over” system, as is normal in the property market in Scotland. This means they did not know what other people were offering, but decided to proceed with their own offer price for the property, which was 10% more than the asking price.

The couple were confident their offer was a serious contender, as they were cash buyers and could proceed with the purchase of the property immediately.

The very morning the bids were due to be unsealed, the local estate agent which was responsible for selling the bank repossessed property pulled the house from the market, under the instruction of the lending institution.

Although it was incredibly disappointing for the couple, the original owner had the right to clear the arrears right up until the moment of the sale.

Bank Repossessed Houses For Sale In The UK

Buying bank repossessed houses for sale in the UK can present a lucrative opportunity for property investors and homebuyers seeking below-market-value deals.

These properties are often priced lower to facilitate a quick sale, offering significant discounts that can enhance the potential for capital growth and rental yields. However, it’s important to approach these properties with caution, as they may require additional work and come with certain risks.

Finding good value repossessed houses for sale in the UK is a longer term plan and the more you look and take the time to investigate, the better the results you are likely to achieve.

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