What Happens to My House on an IVA? Your Property Rights Explained
Published 27th of September 2016·Updated 9 April 2026
Reviewed by: Reviewed for accuracy April 2026
An IVA will not usually force you to sell your home. Your insolvency practitioner (IP) will work to protect your property throughout the arrangement. However, if you own your home and have equity in it, you will almost certainly be asked to attempt a remortgage in the final year of the IVA to release some of that equity for your creditors.
Short Summary
Your mortgage continues as normal throughout the IVA. You must keep up your mortgage payments; the IVA covers your unsecured debts only.
In the final year of the IVA, your IP will ask you to obtain a remortgage valuation. You are only required to release equity up to a maximum of 85 per cent of the property's value.
If you cannot remortgage (because lenders will not approve one during an IVA), your IP will usually extend the arrangement by 12 months instead of forcing a sale.
You should inform your IP immediately if your housing situation changes during the IVA, for example if you inherit a property, move, or receive a significant increase in equity.
Will I have to sell my home to enter an IVA?
No. Selling your home is not a requirement for entering an IVA. The IVA covers your unsecured debts; your mortgage is a secured debt and sits outside the arrangement entirely. Your home is protected as long as you continue to pay your mortgage.
If you own other assets such as a second property, a caravan or a vehicle worth over a threshold set in your proposal, your IP may ask you to sell them to contribute to the arrangement. These are assessed case by case.
What happens to the equity in your home during an IVA?
Equity is the difference between what your home is worth and what you owe on your mortgage. During the first four to five years of the IVA, your equity position is monitored but not acted upon. In the final year, your IP is required to review it.
If your equity is meaningful (typically above a few thousand pounds), your IP will ask you to obtain a remortgage to release some of it. The standard limit is that you should not remortgage above 85 per cent of the property's current value. This protects a safety margin and ensures the mortgage remains affordable.
What if I cannot remortgage during an IVA?
Getting a remortgage during an active IVA is difficult. Most mainstream lenders including Barclays, Halifax and Nationwide will decline a remortgage application while an IVA is on your credit file. Specialist adverse-credit lenders may offer a remortgage, but at significantly higher rates.
If you cannot obtain a remortgage on commercially reasonable terms, your IP will typically agree to extend your IVA by 12 months. You continue making your normal monthly payments during the extension period. This is a standard outcome and is written into most IVA proposals in advance.
What if you move house during an IVA?
Moving house during an IVA is complicated. To buy a new property you would need a new mortgage, which is a form of new credit. Taking on new credit during an IVA requires your IP's permission and lenders will be very reluctant to approve a mortgage application while the IVA is active.
If you sell your current home during the IVA, any profit (equity released) must be declared to your IP. A portion of that profit is likely to be paid into the IVA, depending on the terms of your arrangement. Your IP should be informed before any sale is agreed.
What if you are renting and enter an IVA?
If you are renting rather than owning, your tenancy is not directly affected by an IVA. However, you should be aware that some landlords and letting agents carry out credit checks when renewing a tenancy agreement, and an IVA on your credit file may raise questions. You are not legally required to inform your landlord about an IVA unless your tenancy agreement specifically requires it.
How does an IVA compare to bankruptcy for homeowners?
| Scenario | IVA | Bankruptcy |
|---|---|---|
| Forced sale to enter the process | No | Possible if equity is significant |
| Mortgage continues normally | Yes | Yes, until property is dealt with |
| IP/Official Receiver assesses equity | Yes (in final year) | Yes (within 3 years of bankruptcy) |
| Remortgage required | Likely in final year | May be required |
| Outcome if remortgage not possible | IVA extended 12 months | Trustee may take other action |
| Home protected after process ends | Yes | Yes (after 3-year OR window) |
For homeowners with significant equity, an IVA generally offers better protection than bankruptcy. The Official Receiver in bankruptcy has three years to deal with the property, and if there is equity they will pursue it.
FAQ
Can my mortgage lender find out about my IVA?
Your mortgage lender does not receive direct notification of your IVA. However, the IVA is listed on the Individual Insolvency Register, which is publicly searchable, and will appear on your credit file. If you are on a fixed-rate deal that does not expire during the IVA, your lender is unlikely to take any action.
Will an IVA affect my ability to get a mortgage in future?
Yes, in the short term. An IVA stays on your credit file for six years. During this period, mainstream mortgage lenders will generally not approve an application. After the six-year mark, the record is removed and you can begin rebuilding your credit score. Many people successfully obtain a mortgage two to three years after the IVA drops off their credit file.
Can I sell my home voluntarily during an IVA?
Yes, but you must inform your IP before proceeding. Any equity released from the sale is likely to be treated as a windfall and paid into the IVA in full or in part. Your IP will calculate the appropriate amount based on your IVA terms.
What happens if my house falls into negative equity during the IVA?
If your home has no equity or is in negative equity, the remortgage clause becomes irrelevant. Your IP will note this at the annual review and will not require you to remortgage. The IVA continues for the standard term without a property-related extension.
Do I need to tell my IP if my house goes up in value?
Yes. You are required to notify your IP of any significant change in your financial position, including a substantial increase in property value. This is assessed at the annual review in any case. Concealing information from your IP is a serious breach of the IVA terms and can cause the arrangement to fail.