Property Auction in London; Finding Bargains in a Highly Competitive UK Market
A property auction in London is a great way for informed buyers to find real estate bargains. Property for auction in London is plentiful and available in practically every neighborhood or section of the city. Here are some interesting facts and figures about finding UK residential property auction in London.
Some Informative Numbers
A recent article in the Derby Evening Telegraph reports that “the number of homes up for auction in London has more than doubled in the past year.” It goes on to cite some eye-opening figures, for example that 455 repossessed properties were offered for auction in a 3-month period. This is more than a two-fold increase over the previous year and a 53% increase over the previous quarter. Although this increase indicates that more and more people are defaulting on their mortgages, it also means that there are significant bargains to be had at property auctions in London. In addition, the number of distressed properties for sale in London is also increasing. Combine this with a “credit crunch” that makes obtaining a mortgage difficult and you have a recipe for a depressed real estate market which in turn leads mortgage lenders to turn to London property auction houses in an effort to recover funds.
In spite of a sluggish market, there are bargains to be had from many property auction houses in London, especially in the realm of repossessed residential property or private homes. In fact, the percentage of repossessed properties available for auction has increased from 13.9% in 2007 to about 35% in 2008. In addition, hundreds of building lots are also available. So, what’s the point of all these numbers? Well, it’s to tell you that a property sale auction in London or its environs can net a buyer up to a 40% discount on a property’s selling price. Here are a few examples:
£260,000 paid at a property auction for an Islington apartment. Comparables listed with traditional real estate agents range from £400,000 to £450,000.
£165,000 paid at auction for a Tooting apartment. Comparables are at least £80,000 higher.
£2,030,000 paid at auction for a townhouse in Kensington that contains 5 2-bedroom apartments and 2 studio apartments.
Just these few examples show that auctions are more cost effective, because auction prices tend to reflect real market prices of property as opposed to the inflated prices offered by many agents. And despite the fact that mortgage money is tight, buyers are finding creative ways to finance their properties. For example, buyers are banding together and pooling their money or looking for financial help from parents or other family members. And if you’re willing to be flexible as to where in London you buy your property, you’re more likely to find a bargain property for auction London. You’ll also benefit if you time your purchase properly, for example, buying during a recession when prices are depressed and selling when prices are on the rise.
Bottom line: consider buying at a UK property auction in London because the price is highly likely to be less inflated and therefore more affordable than properties listed by traditional real estate agents.