Form N123: Mortgage Pre-Action Protocol Checklist Explained

At a glance

• What it is: a two-page checklist confirming a mortgage lender followed the Pre-Action Protocol before bringing a possession claim.
• Who completes it: the claimant (lender or home purchase plan provider) or their legal representative — never the borrower.
• Commencement: the protocol took effect on 19 November 2008; use of the standard Form N123 checklist became compulsory for claims issued on or after 1 October 2009.
• Scope: first-charge FCA-regulated mortgages and home purchase plans, second-charge mortgages regulated under the Consumer Credit Act 1974, and unregulated residential mortgages. Buy-to-let lending is expressly excluded by paragraph 4.3 of the protocol.
• Last resort principle: paragraph 7.1 requires the lender to consider alternatives — extending the term, changing the mortgage type, deferring interest, capitalising arrears, or government forbearance schemes — before issuing a claim at all.
• When it's needed: two copies must be brought to the possession hearing — one for the court, one for the defendant.
• If it's missing or shows non-compliance: the court can stay the proceedings until the protocol is complied with and can impose costs sanctions on the lender; non-compliance is not automatically a defence to the claim itself.
• Not the claim form: the claim is started with Form N5, supported by Form N120 particulars of claim. Form N123 is an additional checklist, not evidence of the debt.

What Form N123 is

Form N123 is the checklist a lender (or its solicitor) must complete and bring to a mortgage possession hearing in the County Court. It sits alongside the main claim paperwork but is not the claim itself — it is evidence confirming that the steps required by the Pre-Action Protocol for Possession Claims Based on Mortgage or Home Purchase Plan Arrears in Respect of Residential Property have actually been taken before the matter reached a hearing.

The protocol came into force on 19 November 2008. Its stated aims, at paragraph 3.1, are threefold: to make the lender and borrower act fairly and reasonably with each other in resolving arrears, to encourage pre-action contact so agreement can be reached without using court time, and to encourage lenders to check who is actually in occupation of the property before issuing proceedings. The standard checklist format — Form N123 — became compulsory for all claims issued on or after 1 October 2009, so that every court sees the same structured record instead of a free-form witness statement. The official guidance accompanying the form states plainly that it must not run beyond two sides and that no additional documents are needed unless a specific issue arises at the hearing.

A statement of truth at the end of the form must be signed by the claimant, a litigation friend (where the claimant is a child or a patient), or the claimant's legal representative as defined by CPR 2.3(1). The form itself warns that proceedings for contempt of court can be brought against anyone who makes a false statement in a document verified by a statement of truth without an honest belief in its truth.

When the protocol applies

The protocol's scope — set out at paragraph 4.1 — covers three categories of lending:

1. First-charge residential mortgages and home purchase plans regulated by the Financial Conduct Authority under the Financial Services and Markets Act 2000, as amended by the Financial Services Act 2012.
2. Second-charge mortgages over residential property and other secured loans regulated under the Consumer Credit Act 1974.
3. Unregulated residential mortgages.

Where a potential claim combines a money claim (for the arrears themselves) with a claim for possession, paragraph 4.2 confirms that combined claim is also within scope.

Buy-to-let mortgages are excluded by name — paragraph 4.3 states the protocol does not apply to buy-to-let mortgages — so a straightforward buy-to-let possession claim falls outside it and no N123 checklist is required. Question 1 on the form itself asks the claimant to confirm whether the claim is within scope at all; if the answer is no, the rest of the form does not need to be completed, but the lender must still be ready to explain to the court why the mortgage falls outside the protocol.

Before a lender can even think about issuing a claim

The protocol does not simply require paperwork after the fact — it sets out what the lender has to have actually done beforehand, and the checklist later asks the lender to confirm each step in writing, with dates.

Initial contact and information (paragraph 5.1–5.3). Where a borrower falls into arrears, the lender must provide: the regulatory information sheet, or the National Homelessness Advice Service/Shelter Cymru booklet on mortgage arrears, where appropriate; information on current monthly instalments and what has actually been paid over the last two years; and a breakdown of the arrears, including the total owed, the total outstanding balance, and whether interest or further charges will be added. The lender should also find out whether the property is occupied by an authorised tenant, and must advise the borrower to contact their local authority's housing department and, where relevant, signpost independent debt advice.

Genuine discussion, not just correspondence (paragraph 5.4). Both sides must take all reasonable steps to discuss the reasons for the arrears, the borrower's financial circumstances, and proposals for repayment — considering, for example, whether the arrears are a temporary blip or a longer-term problem.

Responding to the borrower's own proposals (paragraphs 5.5–5.7). If the borrower makes a reasonable request to change the date or method of a regular payment, the lender must either agree or explain its refusal in writing within a reasonable time. If the borrower proposes a repayment plan, the lender must respond promptly and, if it does not accept the proposal, give written reasons within 10 business days.

Final warning before issuing (paragraph 5.8). Where the borrower has broken an agreement, the lender must give at least 15 business days' written notice of its intention to start a possession claim, allowing the borrower a final chance to remedy the breach.

Alternatives to possession — the last resort principle (paragraph 7.1). Starting a claim should be a last resort, used only once all other reasonable options have failed. Before issuing, the lender must consider whether it is reasonable to extend the mortgage term, change the type of mortgage, defer interest payments, capitalise the arrears, or use any government forbearance initiative it takes part in.

These are the matters the checklist asks the lender to confirm — with dates, where a date applies — once a hearing date has been set.

What Form N123 actually asks

The official version of the form (last substantively revised October 2020) puts nine questions to the claimant, each tied to a specific paragraph of the protocol:

1. Is the claim within the scope of the protocol? (Paragraph 4.1.) If no, the rest of the form is not completed, but the lender must be ready to explain why to the court.
2. Has the required information been provided to the defendant, with the date each item was given — the information sheet or debt-advice booklet (paragraph 5.1(a)), the instalment history (paragraph 5.1(b)), the arrears breakdown (paragraph 5.1(c)), and, where the borrower broke an earlier agreement, the 15-business-day notice before issuing (paragraph 5.8)?
3. Is there evidence the defendant has claimed Support for Mortgage Interest (or Universal Credit), a mortgage rescue scheme or other homelessness-prevention support, or mortgage payment protection insurance (paragraph 6.1(a)) — and if so, why is possession still being pursued?
4. Is there an unresolved Financial Ombudsman Service complaint that could justify postponing the claim (paragraph 8.1), and has the lender given the borrower notice with reasons if it does not intend to wait for the Ombudsman's decision (paragraph 8.2)?
5. A summary of the number and dates, in the three months before the checklist, that the lender attempted to discuss repayment of the arrears with the defendant (paragraph 5.4).
6. Has the lender rejected a request from the defendant to change the date or method of regular payments in the previous three months, and did it respond correctly if so (paragraph 5.5)?
7. What steps has the lender taken to check for an unauthorised tenant at the property, and what possession order is it now seeking in light of what it found (paragraphs 3.1(c) and 5.2)?
8. Has the lender rejected a repayment proposal from the defendant in the previous three months, and if so, why (paragraph 5.6)?
9. Has the defendant indicated the property will be, or is being, sold (paragraphs 6.2 and 6.3)?

Question 7 exists because a residential mortgage possession claim can affect people who are not party to the mortgage at all — a tenant renting from the borrower without the lender's knowledge. The protocol defines an "authorised tenant" as one whose tenancy is authorised as between the borrower and the lender; anyone else is, by implication, unauthorised. The Mortgage Repossessions (Protection of Tenants etc) Act 2010, in force since October 2010, gives such unauthorised tenants a right to be heard at the possession hearing, lets the court take their circumstances into account, and allows possession to be postponed by up to two months so a tenant can find somewhere else to live. Where a tenant's occupation is authorised, paragraph 7.2 of the protocol instead directs the court to consider further directions, adjourning the claim until possession is recovered against the tenant separately, or making the order conditional on the tenant's right to remain.

What happens if the lender hasn't followed the protocol

Failing to follow the protocol does not, by itself, give the borrower a substantive defence to the possession claim. But under the general Practice Direction on Pre-Action Conduct and Protocols, the court takes compliance into account both when managing the case and when deciding costs. Paragraph 13 of that Practice Direction makes clear the court expects substantive compliance, not perfection — it is not usually concerned with minor or technical infringements, particularly in an urgent case. Where a lender has not complied in substance, paragraphs 15 and 16 allow the court to:

• Order that the proceedings are stayed while the missing steps are taken.
• Order the lender to pay some or all of the costs of the proceedings, potentially on an indemnity basis for a serious breach.
• Reduce the interest the lender can recover, or increase the interest a borrower is entitled to if a money claim is also involved.

In practice, this usually means an adjournment: the judge gives the lender a further period to demonstrate compliance — completing missing notices, or having the genuine repayment conversation the protocol requires — before the possession question is decided.

Example: an adjournment for a missing repayment discussion

A lender issues a possession claim after three missed payments, but the Form N123 checklist shows no record of any attempt to discuss repayment options with the borrower in the three months beforehand (question 5), and question 2 is answered "no" for the initial arrears information. At the hearing, the judge is not satisfied the protocol has been followed in substance. Rather than granting possession, the court adjourns the hearing and directs the lender to carry out the missing steps — including a genuine attempt under paragraph 5.4 to discuss repayment — before the claim can proceed, and reserves the question of costs.

Form N123 compared with the claim form

Form N123 is easy to confuse with the claim itself, but they serve different purposes:

| Form | Purpose | |------|---------| | N5 | The claim form that starts a possession claim under CPR Part 55. | | N120 | Particulars of claim for mortgaged residential premises — sets out the facts and the amount of arrears relied on. | | N123 | The pre-action protocol checklist — confirms the steps taken before the claim was issued. It is not evidence of the debt. | | N11M | The defence form a borrower completes in response to a mortgage possession claim. |

Detailed procedural requirements for possession claims, including what must be filed and served, sit in CPR Part 55 and Practice Direction 55A. Issuing a possession claim also requires a court fee — the current amount changes from time to time, so check GOV.UK's civil and family court fees schedule (EX50) before issuing.

Support for Mortgage Interest and other welfare options the checklist asks about

Question 3 on Form N123 asks whether the borrower has made a claim for Support for Mortgage Interest (SMI), Universal Credit, a mortgage rescue scheme, or mortgage payment protection insurance. It's worth understanding what each of these actually is today:

• Support for Mortgage Interest is no longer a benefit payment — since April 2018 it has been a secured government loan, available to people receiving Universal Credit or Pension Credit, which helps cover mortgage interest but is repaid, with interest, when the home is sold or transferred, or when the claimant dies. GOV.UK confirms the loan can cover interest on a mortgage or qualifying loan up to £200,000 for most working-age claimants, or £100,000 for pension-age and certain legacy claimants — check GOV.UK for the current caps and interest rate, as both are reviewed periodically.
• Mortgage rescue schemes run by local authorities largely closed to new applicants across England by early 2014. Where a borrower still refers to one, the lender should establish whether any live application actually exists rather than assume the historic scheme applies.
• Mortgage payment protection insurance is a private policy the borrower may hold separately from the mortgage itself; under paragraph 6.1(a) of the protocol, if a claim has been made and the evidence needed to process it provided, the lender must not consider starting proceedings.

If the borrower has a live application under any of these routes, paragraph 6.4 requires the lender, if it decides not to postpone anyway, to tell the borrower why — at least 5 business days before starting proceedings — and to explain that on the checklist. See GOV.UK's guidance on repossession for the wider range of options available to someone struggling with mortgage payments.

If the borrower is selling the property

Question 9 asks whether the defendant has said the property will be, or is being, sold. Under paragraph 6.2 of the protocol, if the borrower can show that reasonable steps are being taken, or will be taken, to market the property at an appropriate price on proper professional advice, the lender must consider postponing the claim to give a realistic period for the sale to complete. Paragraph 6.3 then sets out what the lender can expect in return: the borrower should provide the particulars of sale, an Energy Performance Certificate (or proof one has been commissioned), details of any purchase offers, and the names of the estate agent and conveyancer instructed — with authority for them to update the lender on progress. This does not mean any mention of a possible future sale automatically stops the claim; the lender's checklist answer must explain, specifically, why proceedings are continuing if a genuine sale is in progress.

Example: a postponed hearing while a sale completes

A borrower falls into arrears after a change in circumstances but instructs an estate agent and puts the property on the market at a realistic price on the agent's advice. She gives the lender the agent's details, a copy of the sale particulars, and confirmation the EPC has been commissioned, and authorises the agent to update the lender directly. Two months later an offer close to the asking price is accepted. On the Form N123 checklist, the lender records this evidence against question 9 and explains that, because the borrower is actively marketing the property and a sale is progressing under paragraph 6.2, it is not asking the court to proceed to an outright order at this hearing — instead seeking a short adjournment to allow completion.

What to do next

1. If you are the lender or acting for one: confirm scope first (question 1), then work through the checklist chronologically against your own arrears file — the paragraph 5.1 notices, paragraph 5.4 discussions in the last three months, any paragraph 6.1 welfare claims or paragraph 8.1 FOS complaint disclosed, and the paragraph 5.2 tenant check. Gaps in the record are the most common reason hearings get adjourned.
2. If you are the borrower: read the checklist the lender produces at the hearing carefully. If it records notices you never received, discussions that never happened, or omits an FOS complaint or SMI claim you've actually made, say so — the court can take an inaccurate or incomplete checklist into account.
3. Check whether the protocol even applies to your mortgage. Buy-to-let lending sits outside it under paragraph 4.3; most owner-occupier residential mortgages and home purchase plans are inside it.
4. Keep your own paper trail. Letters, emails, and notes of calls about repayment proposals are what both sides rely on to complete, or challenge, questions 2, 5, 6 and 8 of the checklist.
5. If a sale is genuinely underway, get the evidence in early — estate agency instructions, marketing particulars, the EPC, and offers — so it can be put before the lender and, if needed, the court under question 9.
6. Take advice early if a hearing date is set. The checklist and protocol interact with the specific facts of your mortgage and arrears history, and an adviser can help you understand what the checklist should show and what to do if it doesn't.

This guide provides general information about Form N123 and the Mortgage Pre-Action Protocol in England and Wales. It is not legal advice and is not a substitute for advice tailored to your specific circumstances. The law described was accurate as at August 2026 and is subject to change — always check GOV.UK and justice.gov.uk for the current position.

Last reviewed: August 2026 · Next review due: August 2027 or on protocol/rule change.