Housing Chains Pay To Keep Buyers

[Bucephalus]

Not sure if this has been posted already

http://news.ft.com/cms/s/cd6970fa-216f-11d...000e2511c8.html

Housing chains pay to keep buyers

By Jim Pickard

Published: September 9 2005 21:35 | Last updated: September 9 2005 21:35

House for sale “Co-operation” is a rarely heard phrase in the dog-eat-dog world of property sales. But in today's sluggish housing market, some buyers are shelling out thousands of pounds to strangers just to stop housing chains from collapsing.

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Prices have not increased since December last year, according to the latest FT house price index published on Friday. The annual rate of inflation has declined from 15.2 per cent in August 2004 to 3 per cent after another small drop of 0.1 per cent last month.

Many buyers have been able to obtain discounts on the asking price as the number of house-hunters falls.

Now agents are also reporting a growing number of instances in which one buyer in a chain wants to pull out usually because a survey has found expensive structural problems in a property but the others, desperate to keep the chain intact, have chipped in to pay for the repairs.

Such transactions illustrate the clout wielded by first-time buyers who can potentially hold up a series of other, far more expensive deals.

Ed Mead, director of Douglas & Gordon, the estate agents, said he had seen more examples of this happening in recent months. Often agents as well as buyers put up thousands of pounds to stop the chain collapsing.

Peter Bolton King, chief executive of the National Association of Estage Agents, said first-time buyers were in their strongest position for years.

“If there is a shortage of buyers in the market, this sort of thing is more common. You never want a chain falling down.”