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If a major property auction held in London this week is anything to go by, a dreadful story is about to unfold that could engulf the bonanza that was Britain’s new-build buy-to-let sector.

The auction, organised by Barnard Marcus and held in the plush Café Royal on Regent Street, featured 255 lots ranging from a parking space in Hackney (reserve price £6,000) to a terrace of five buildings in south east London which failed to sell despite attracting bids of £2.1 million.

rest of the blog entry here :

http://www.citywire.co.uk/Blogs/Property/E...VersionID=96658

makes interesting reading.

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This is an absolute gem.

BTL flats going as repos to auction and not meeting the reserve - where the reserves were around 70% of 2005 prices.

It seems from this that the current price of new build 'luxury' flats has fallen dramatically already.

I suppose that the reserve is there for the lenders to make sure that the flat doesn't go for peanuts if no one turns up at the auction. But ...

what if no one turns up for the auction next time, or the next time, or the next time?

At some point the lender is going to want to shift the repo and get some money back.

If there's a forum member who knows what happens when a lender can't flog off a repo - can you please tell us?

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This is an absolute gem.

BTL flats going as repos to auction and not meeting the reserve - where the reserves were around 70% of 2005 prices.

It seems from this that the current price of new build 'luxury' flats has fallen dramatically already.

I suppose that the reserve is there for the lenders to make sure that the flat doesn't go for peanuts if no one turns up at the auction. But ...

what if no one turns up for the auction next time, or the next time, or the next time?

At some point the lender is going to want to shift the repo and get some money back.

If there's a forum member who knows what happens when a lender can't flog off a repo - can you please tell us?

Can't tell you that but I can tell you that these flats have been discussed on HPC before. On 21 Sep I posted the following:

http://www.housepricecrash.co.uk/forum/ind...45&start=45

Yes, but properties are quite often at Auction by virtue of the fact that they are difficult to sell. They make the point well in your link about the Vista Building in Calderwood Street London - it seems to be a block of around 225 flats and many of them are now re-selling at 2004 prices. So, whilst I take your point, if Calderwood Street were in any way representative of the housing market as a whole then we would be back to 2004 prices already. Unfortunately (or maybe not depending upon your viewpoint) there will be winners and losers in the property market whatever HPI - sadly (for them) the Vista Building owners have not seen the HPI they would have wished.

Edited by pimperne1

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If a major property auction held in London this week is anything to go by, a dreadful story is about to unfold that could engulf the bonanza that was Britain’s new-build buy-to-let sector.

The auction, organised by Barnard Marcus and held in the plush Café Royal on Regent Street, featured 255 lots ranging from a parking space in Hackney (reserve price £6,000) to a terrace of five buildings in south east London which failed to sell despite attracting bids of £2.1 million.

rest of the blog entry here :

http://www.citywire.co.uk/Blogs/Property/E...VersionID=96658

makes interesting reading.

Congratulations on your first post by the way. :rolleyes:

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as these buildings become a realistic price they will draw potential buyers away from better properties which will also start to fall in price

With respect, your statement lacks logic. If the Vista Building flats are unattractive, people who can afford better properties will buy them because they are cheaper?

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With respect, your statement lacks logic. If the Vista Building flats are unattractive, people who can afford better properties will buy them because they are cheaper?

No, people who can't really 'afford' better properties but could nevertheless buy them with the help of kamikaze mortgages will see that there are alternatives to financial suicide.

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No, people who can't really 'afford' better properties but could nevertheless buy them with the help of kamikaze mortgages will see that there are alternatives to financial suicide.

Good, it seems a pity for these properties to be sitting empty when there are people prepared to buy them.

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I imagine in the current credit crunch there's an added impetus to get these properties sold in order to recoup the cash. If there are many of these unsold properties "hiding" in the system and by the sounds of it there are; they may well be spewed out and sold at even lower prices which will provide a sharp shock to the pricing structure. Watch the land registry figures, mind you by the time you see them there it's well past the event. :o

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No, people who can't really 'afford' better properties but could nevertheless buy them with the help of kamikaze mortgages will see that there are alternatives to financial suicide.

Yes, it makes more sense if what he is saying is "people who can't afford better properties will buy them because they are cheaper". This won't divert buyers from the other properties though once this slack has been taken up (unless there is a HPC).

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Yes, it makes more sense if what he is saying is "people who can't afford better properties will buy them because they are cheaper". This won't divert buyers from the other properties though once this slack has been taken up (unless there is a HPC).

I do see what you're saying pimperne1 and while I agree with the above point, I think this will still affect the wider market. What will actually happen is that it will divert buyers from roughly comparable properties that may be overpriced and drive their asking prices down.

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