Is It Finally the Time to Buy New Builds - or at Least Nearly New Builds - The New Build Repossesion Markets For over five years Whitney UK has always been hesitant in advocating the purchase of new build flats in the UK market, unless you really knew what you where doing. There is no secret to the fact that most of the speakers, mentors, and staff have stayed away from new builds, so why would we question this strategy now? In one word: repossessions.
Repossessions of new builds are spiralling and appearing at the auction houses at knock-down prices as even the mortgage companies look at offloading these as quickly as possible.
We have spoken in the past about the number of new build flats being built and due to be built. In June we spoke about Liverpool where there were over 2,000 new flats appearing on the already saturated market, with a further 2,000+ due next year, but with over 10% of the current flat market untenanted.
How many of these where bought by novice investors, the real "get rich quick flunkies," individuals who listened to salesmen rather than listening to investors, people who bought a dream rather then investing in success? Either way, with higher interest rates, lower rents then expected, higher void periods, and, even worse, lower valuations than originally paid, this has meant that this market is being hit hard.
Recently at auction a flat bought in Ipswich for £279,000 in early 2006 that had been repossessed and was sold for £140,000. Now this is an extreme case, but the mortgage companies are just cutting their losses with these new build repossessions. Quite simply there are two many for such a small market and with further new builds appearing, the numbers of individuals looking to buy these kinds of properties are becoming scarce.
So is it time to invest? If you look around you will certainly find bargains to be had at the auction houses. Visiting those network meetings again to see who is looking distressed might not be a bad idea. But for all those students who had previously tried other companies before Whitney, we would suggest that you get out that old list of delegates who you previously met and who joined the property buying club on offer that day. They might now have a bargain or two to sell you! |
