Should I hand back my house?
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Should I hand back my house?

Last Updated: Sunday 17th March, 2013

It is possibly the most unfortunate result of the recession. More and more mortgage lenders and charities such as Shelter are watching as home owners are handing back their homes to banks and building societies.

Experts are suggesting that people are more willing to give their house keys to their lender quietly than to face the stress and worry which comes from meeting the issues face-to-face in court.

According to an article recently published by The Independent, high street lenders are amazed by the increasing numbers of 'voluntary repossessions', with one anonymous bank representative saying, "This is a definite trend and harks back to the early 1990s when hundreds of people who couldn't pay their mortgages just posted us their keys. Instead of doing this, people in arrears should talk through their options with their lenders..." The anonymous banker gave sound advice. There's no need to panic.

Banks and building societies would rather keep you as a customer who pays them regularly, than lose you entirely and force you to leave your own home. They want to help you regain confidence and financial stability and will point you in the direction of those who can advise you on what to do next.

Repossession - Warnings

Mortgage industry experts say, "If you make a concerted effort to seek help and are completely honest with your lenders you might be able to rearrange your finances and not have to go to court. So, don't give up your house prematurely."

Debtwatchdog have also said that many people decide to just hand their house keys to their debtors because they can't cope with repayments and they are too frightened to face going to court. They know they have broken an agreement and feel guilty, but also feel over stretched financially and want to feel free again.

If that means losing their homes, for some people that is sadly an acceptable cost. It doesn't need to be that way though. There are so many ways to get help and to consolidate other debts that are preventing you from meeting repayments on your mortgage. Entering a voluntary possession also seems like a good idea to some people because they think if they sell soon they might not be left in negative equity, but that's not always the case. Often houses from repossessions are sold at auction.

Auctions offer someone else the chance to buy your home often at a bargain price and leave you out of pocket. In the aforementioned article by the Independent, a debt organisation, also commented on people giving in their keys to lenders, "It's a cry for help," they said adding that, "The unfortunate thing is, though, that out of the thousands of people we advise, around a third ultimately can't stay in their homes."

This leaves two thirds of people who can be helped by the agency, a vast majority of those struggling with debt and considering voluntary repossession. The answer then, to the main question "Should I hand back my house?" is "No." Giving up your house is a bad idea when there are so many other avenues which you could take in order to save it.


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