Assetz® News - A chance to hammer some bargains

A chance to hammer some bargains

22nd July 2008 |

The recent negative economic statistics and the much more gloomy predictions about the UK economy from many quarters may or may not exaggerate the true strength of the UK economy, but there can be little doubt that the current property market is very different to the way it was a year ago.

While one measure of bad tidings - the number of repossessions - may defy the worst estimates of how many will take place, few would argue that the number will go up. The question for those investors who are in a far stronger position and with the funds to add to their portfolio is what opportunities this might create.

According to organisers of the Property Investor Show, there are already signs of some emerging in the south-east region. According to the experts at the show, a rise in repossessions has meant more properties going under the hammer at auction for knock-down prices, up from 799 in the first half of 2005 to 3,102 in the first six months of this year, an increase of nearly 300 per cent.

The managing director of EI Group David Sandeman said: "Repossessions now make up over 20 per cent of the properties on sale at auction. Banks and lenders offering repossessed properties are often keen to secure a sale on the day and are less worried about achieving a high price. As a result these properties are selling extremely well compared to other lots, with investors bagging some excellent deals. New build flats are also selling at huge discounts."

Those looking to buy in this way might wish to concentrate on those counties just north and west of London, with 69 per cent of auctioned homes in Hertfordshire, Buckinghamshire and Berkshire selling on the day they were put up in May. This suggests quick sales - at low prices - are available in abundance in these locations.

Mr Sandeman is not alone in recommending the value of auctions as a way of investing in property. Writing in the Times at the weekend, Phil Spencer, chief executive officer of the property search company Garrington advised there are a number of ways investors can do well in the current climate. Having noted the possibilities of haggling and gazundering to bring asking prices down, plus the chances to snap up properties in seaside areas that have hitherto been used as holiday homes, he advised auctions could also bring plenty of bargains too.

These, Mr Grarington stated: "Can be a great source of bargains, especially now that sellers are becoming more realistic about guide prices."

He went on to advise: "Watch a few to get the hang of things before you bid."

Repossessions are certainly a sign of bad news in the property market, particularly for the victims. But the fact that they can create bargain deals for investors who look carefully for them also demonstrates that in any market there will still be those who can deal successfully.