The number of repossessed properties peaked in 2009 at close to 50,000 but is now down to below 30,000 today.
Buying a repossessed property can be a specialist area and investors should be thoroughly prepared as repossessions tend to be bought from banks or mortgage lenders rather than homeowners.
Firstly, consider the price you are buying at as banks have a legal duty to obtain the highest price they can on the repossessed properties they are re-selling in order to recover as much of the outstanding debt as possible on the property. This often means banks will leave properties on the market for a long time allowing the maximum possible bid to be received, thus your surveyors fees are at risk of being wasted.
Also, the offer process is elongated. The agent is legally obliged to place a public notice ('Notice of Offer') and other potential purchasers are invited to bid for a period of 7 days from the date of the advert.
Also, the popularity of auctions and the lower level of current repossessions has made it tougher to source properties below market value at auction. Therefore, any investment needs to be thought through and be for the long-term.
If you have the knowledge, and can handle the financial risks, buying a repossessed property for buy-to-let investment could be a very financially rewarding solution for you.
If you are a first-time investor though, going down the repossessed route could be time-consuming and complicated.
The Buy 2 Let Shop will offer you access to below market value properties and lead you through the whole process.
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