A mortgagee can obtain possession either by court order or by peaceable re-entry. Once in possession, the mortgagee can choose whether or not it wants to sell the property, and there is no obligation to consult with the mortgagor. Subject to an overriding duty to maintain the property and keep it in good repair, the mortgagee can therefore hold onto the property for as long as it wishes (eg until the property market recovers). In short, there is no obligation on the mortgagee to sell within a reasonable time.

However, if it is a trustee in bankruptcy that is in possession, then different considerations may apply. Under Enterprise Act 2002, a trustee in bankruptcy has three years in which to sell the bankrupt’s home, failing which it will revert back into the bankrupt’s estate (and thus not be available to the trustee in bankruptcy). Note that this only applies to the bankrupt’s home (ie it does not apply to other property – such as a second home). But, the point to appreciate is that if a trustee in bankruptcy is in possession, then the trustee will need to take action within three years.