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Surrendering your property

If you know you can’t afford to continue making your mortgage payments one option is to sell your property and find more affordable housing.

There are always costs involved if you want to sell your house. You’ll need to pay for things like a valuation and the estate agent's fees. You may also need to pay for removal costs or a deposit if you’re moving into rented property. These costs may be especially tough if you also have mortgage arrears.

Can my lender help with selling my home?

If you can’t afford the costs involved, contact your mortgage lender. Tell them that you can't afford to continue paying your mortgage and would like to sell your house as they may be able to help you do this.

Some lenders offer an assisted voluntary sale scheme. These are specifically designed for people who are struggling financially. The scheme normally gives you time to sell the property and will provide extra help with the costs involved. Your lender may agree to accept reduced mortgage payments until the property is sold.

Handing back your keys

If your lender isn't able to help you sell your property you could consider handing your keys back to them. This is known as voluntary surrender.

You should think very carefully about handing back the keys to your home. Contact us first for expert debt advice and to see if there are other options available.

It’s almost always better to put the property on the market and sell it, even if you’ve had to move out. This is because you’ll get a better price by selling it than you would be handing it to your lender to sell.

Before handing back your keys there are a few things you’ll need to do:

  • find alternative accommodation
  • remove all your possessions as you might not have access the property once you’ve returned the keys
  • take final meter readings for your utilities
  • let your local authority and utility suppliers know you’ve moved out

Once you’re ready, you just need to give the keys to the mortgage lender and explain the situation. You can do this by handing in the keys at a branch or posting them by special delivery. If you post the keys make sure you only include your mortgage account number, not the address, for security purposes.

What happens once I've surrendered my property?

Once you've handed your keys back your lender will sell the property on your behalf. If any money is made from the sale you’ll get this back, but as the property will usually be sold at auction it may not make the best price. If the property sells for less than the outstanding mortgage, you’ll have a mortgage shortfall and will need to pay this back to the lender.

You’ll usually still be responsible for some costs until the property is sold, including council tax and water rates. You should also keep the buildings insurance policy running until the house is sold.

Help and advice

If you’re struggling with your mortgage payments and are thinking of selling your property, contact our Helpline. Our expert advisors will put together a personal budget and give you tailored advice on how to deal with your housing situation.