Souring demand means fewer repossessions are auctioned off cheaply
Tuesday August 4,2009
By Sarah O’Grady
DEMAND for property is so strong that buyers can no longer get repossessed homes at knock-down prices.
There are so many people chasing each sale that a typical three-bed repossession is less than £10,000 below the normal market price for such properties.
Nicholas Leeming, of propertyfinder.com, said the number of buyers searching for property was “sky-rocketing” while many potential sellers remain reluctant to put their homes on the market until prices pick up further.
He said: “Frustrated buyers are chasing anything available. The big discounts repossessions used to attract are melting away as buyers realise there are good- quality homes to be had.
“A chain-free property with a bit of a discount is a big draw.”
The average price of a repossessed property is £151,700, while the Halifax puts the average for homes sold directly by the owners at £161,437.
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Dominic Toller, of chain-free property website PropertyEarth.Net, said: “The sellers of repossessed properties are motivated to sell as quickly as possible, for as much money as possible.
“There is a public perception that repossessed properties are always in bad condition, but many are fantastic properties which need very little investment.”
The latest statistics from whitehotproperty.co.uk, the UK’s largest dedicated website for the sale of repossessed properties, report that, contrary to popular belief, repossessions are not always sold at vastly discounted prices.
On average, properties sold for £9,737 – 6.4 per cent – less than comparable properties on the Halifax Property Index.
The South-east had the greatest markdown with properties trading at a 13.5 per cent discount.
However, in the North-west, repossessed properties were receiving comparable offers and in the West Midlands only 1.5 per cent – £2,000 – was cut from the price.
According to latest figures from the National Association of Estate Agents, there are four buyers for each seller. Buyers have been tempted back into the market by low prices and record low interest rates.
David Smith, senior partner at property consultancy Carter Jonas, said: “Inquiries from prospective buyers are higher than they have been for many, many months and confidence is certainly growing.”
But Matt Hutchinson, director of Spareroom.co.uk, said the number of owners renting out their homes rather than selling them was stripping the market of a source of houses for sale.