New buyers could benefit from slashed auction prices on property
January 8, 2009
With the housing market experiencing volatile conditions and mortgages becoming increasingly difficult to get, many new buyers have found that when it comes to purchasing a property they have had to hold off because of affordability problems or simply because of the risk of property prices falling further after they have purchased the property that they want. However, some people could find that they are able to get their hands on a bargain property by going to auction, where they could end up paying far less than they imagined.
Experts are stating that auctions are now slashing prices on properties, and this could give new buyers the chance to bag a property bargain in what has become an increasingly difficult climate. Banks are trying desperately to sell off repossessed properties and this has resulted in knock down prices on properties at auction.
Reports suggest that some properties that were valued at around £250,000 last year are going for as little as £100,000 at auction after the previous homeowners were unable to keep up with mortgage repayments and the property was repossessed by the lender.
The sharp increase in repossessions, which the Council of Mortgage Lenders expects to continue, has led to a rise in the number of properties going under the hammer, and because the finances of banks are in such a mess and they want to try and raise money as quickly as possible they are often selling off the properties at a fraction of the value.
Figures show that at one recent auction around 80 percent of the properties that were going under the hammer were repossessions, reflecting just how many repossessed properties are being sold through auction at the moment.
One investor said that he bought a flat at auction for under £80,000 recently, stating: ‘I first saw this flat a few months ago, advertised by local agents at £149,000. Then by chance I saw it in the Allsop catalogue and went to the auction and got it for well below the limit of what I was prepared to spend. It was an absolute bargain. This is my fourth investment flat. I started buying last year and bought the third in August, also for a good price. I will let it until the market recovers, and when it comes back to what I think is its real value I’ll sell.’
One auctioneer spoke about a recent auction stating: ‘Each day attracted strong bidding. There was a significantly higher proportion of private buyers this time. Prudent buyers have the opportunity to enter the market once more.’
He added: ‘The auction room seems to be the only marketplace that’s working currently.’
A number of industry officials have said that given the low price of property at auction those that have some capital put aside and those that are able to get a mortgage in the current climate could find that the auction is the perfect way to go in order to get their hands on the ideal property.
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