The Power of Sale is a statutory or contractual right allowing a secured lender to sell the charged property—often land or a development site—without needing a court order, once the borrower has defaulted. Under the Law of Property Act 1925, this power is commonly exercised by mortgagees or fixed charge holders in property development finance. It enables lenders to recover outstanding debt by disposing of the asset, usually after serving a Notice of Default and allowing for any statutory waiting periods. It is a central tool for debt recovery within UK property security enforcement.
In practice, the Power of Sale forms a key component of Security Enforcement and Receivership, giving lenders a direct route to realise security where a development loan remains unpaid. For property developers, its existence underpins many lending decisions, as the ability to dispose of a charged asset can significantly reduce recovery risk and support higher levels of secured funding. It is often contrasted with Foreclosure, which involves a different legal outcome and process for enforcing security. The concept can also become particularly relevant in facilities structured around No Interest Until Sale, where repayment is closely linked to the disposal of the completed asset.
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