Sunday, June 1, 2008

Buy “40% below market value”!

House auction angst: going, going - not gone

at the auction held on May 15 only 14 of the 46 residential lots offered (30 per cent) sold successfully. an investor buying a property at the reserve price could be paying up to 40 per cent below an estate agent's price. mmm... so what is the real market value?

Posted by confused76 @ 09:21 AM (1489 views)
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13 thoughts on “Buy “40% below market value”!

  • george monsoon says:

    The real market value is the same as it always was.. ..i.e. whatever someone is willing to pay.
    I would love to go and buy at auction, but unfortunately you cannot secure a mortgage anymore for auctions.

    Just read that alliance and leicester will only lend to borrowers with 50% deposit, so that means I could afford to borrow about 4 and a half grand.
    lovely!!

    I wish these goal posts would stop moving backwards, just when I think Im ready to score a house.!!!

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  • Have a look at the most recent Allsop auction results – check out Lot 200, a flat at Pacific Wharf London SE16 (Lot 200)

    http://www.auction.co.uk/default.asp?Auction=R

    This repo was sold for £210k, having been last sold in 2001 for £187.5K – a gain over seven years of just 12%!

    Now look at sale history of the other flats in this block:

    http://www.houseprices.co.uk/e.php?q=SE165QF&n=10

    The people who bought the other flats more recently must be absolutely gutted by this result…

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  • japanese uncle says:

    Unfortunately for those investors who thought they enjoyed great bargain ie 40% reduction, price of their properties will further go down the gutter until they reach 35-40% of the original lunatically inflated prices. Sorry for speaking the truth.

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  • “Sorry for speaking the truth.”

    Never apologise for that!

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  • @george monsoon

    “I wish these goal posts would stop moving backwards, just when I think Im ready to score a house.!!!”

    Do you really want to buy now? If current trends in price continue – never mind accelerate – then you can save thousands of pounds per month by just standing back and watching. I’d like to buy as well but not now. Not for at least two years I suspect.

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  • montesquieu says:

    Can’t be long before this feeds into Land Registry price index ….

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  • mark wadsworth says:

    Monty, it will take exactly two months to feed into HMLR index, as Growler pointed out and I did more research on yesterday.

    Further, HMLR record all prices back to 2000, so what they can do is match up the same house that was sold more than once and they know exactly what price changes are.

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  • doom&gloom says:

    “For every property that makes it into the catalogue, several are being turned away because the seller will not accept the low reserve.”

    Sellers – time to wake up and smell the coffee. Accept a ‘low reserve’ now, or alternatively, continue to live in denial until prices fall another 30% and the only mortgage rate you can get is the SVR or nothing. Then the bank will repossess and auction it anyway with no reserve. Ah, Schadenfreude…

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  • mark / monty,

    Auction sales make up only a tiny proportion of property sales. In 2005, there were 15,514 auction sales, out of total sales of over a million. Therefore these figures won’t have much impact on the Land Registry stats.

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  • stillthinking says:

    Will the banks repossess though? They might not if they want to get their money back. If the repossessed prices tank sufficiently they will allow arrears to build up rather than declare a loss. I don’t think that people will just accept their house going and being landed with the debt of the difference. They will go for bankruptcy, leave the country, anything to get out of the repayment. They are paying for absolutely no benefit to themselves, and to cover a drop will take years and years. Who would do it? I wouldn’t personally.
    So I think the banks will stop repossessing pretty soon because not worth it. Worth it now maybe, but when the auction prices are gone and they can’t even shift them for the reserve, they are going to leave people in their homes and grab the debt out of them that way. Thats why the interest only mortgage holders are truly in schtuck, because they are at the limit already.

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  • as mentioned in another post, more good news, personaly i can”t wait till 2010, when i think i will finaly have the chance to buy a house without being enslaved for the rest of my life..

    Thanks to UT,JU,Confused76,S2R1 etc and the developers of this great website, i came accross it by accident about 18 months back, and it made me delay my purchase, even thou VI were placing stories about 1 million pound average homes (by 2020) on the teletext, and more chance of Elvis on the moon and the rest of the Bull..

    You guys have saved me a fortune!!

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  • I think it would be a good idea to list all the VI Twats, and some of their past predictions somewhere on this site, i might then try to email themcontact them for their opinions now.. and on my opinion on them, if you think about it a lot of people have fallen for their crap and are now suffering pretty badly..

    just an idea..

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  • Simon Haley says:

    how to work the system

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