How does the repossession system work in UK on mortgage defaults?

Hi,

A United Kingdom question here.

Say a person lives in House A which is worth roughly £500k and has a residential mortgage outstanding of £200k.

Say that person is landlord of House B which is on rent to third party tenants. House B is worth £400k and has a buy to let mortgage of £320k.

If the house market crashes by 40 percent, then House A is now worth £300k (with a £200k mortgage), and house B is worth £280k (with a £320k mortgage).

If the person starts to default on the mortgage payments on House B (but still meets all payments on House A), I presume the lender for B will want to repossess B and try to get their £320k back.

What would be the process?

Am I right in thinking that the mortgage was secured on House B and so the lender can repossess and sell it on and keep the proceeds. However the sale may only realise £280k which is £40k short. Will the person still be liable for the £40k and would his residential home (house A) be at risk of repossession if he cannot pay this £40k?

Cheers

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