It hasn’t always been thus; when my then husband and I bought our first home back in 1972, our parents looked on with an almost tangible pride. You see, they lived in council houses – and council estates in those far away days were not the bridge-too-far that they are seen to be now. Most council home owners cared for their property every bit as much as if they owned the bricks and mortar themselves; true, at my ‘posh’ all girls grammar school I was looked down upon for a while – I was the first ‘estate-kid’ to be admitted to that school and most of my peers were the daughters of bank managers and solicitors. The fact remains that, before the first World War, over 90% of the population rented their homes. Wealthy folk who could quite easily have afforded to buy a house didn’t bother because the link between social status and home ownership hadn’t evolved.

Following the war women’s magazines, spurred on by the men coming home from the front, were filled with articles on homemaking, family and marriage and the idea of home ownership grew more and more attractive. This was compounded by the labour government, which viewed home ownership as a way for the electorate to free themselves from tyrannical landlords.

Thatcher and Hesseltine’s Housing Act of 1980 allowed tenants who had lived in their homes for at least three years to buy at 33% discount of the market price and 44% for a flat; if you had been living in your council home for more than 20 years the discount increased to 50%. Following this, home ownership soared, growing from 55% of the population in 1980 to 64% in 1987. When Thatcher left office in 1990, home ownership stood at 67%. An all time high of home ownership was reached in 2003 when 71% of the population were owner occupiers.

During the intervening years the British population has hankered to fill their homes with the latest fixtures and fittings and home improvement programmes fill our television screens whilst the newsagents’ shelves groan beneath the weight of home improvement magazines. But is the Sarah Beeney generation on its way out?

The past three years of economic turmoil and housing market stagnation has led to a sea-change and Britain is rapidly becoming a nation of renters and investing home improvers. The number of home owners has fallen to 67% and that number is forecast to fall to 60% by 2020

With mortgage companies demanding £20,000 as a deposit, first time buyers stand little chance of getting on the housing ladder without help from their parents and the credit crunch means that far fewer parents are in a position to help their offspring to do so.

It shouldn’t be surprising then that those privately renting their homes make up 14% of the population, a significant rise from the 8% of the late eighties. Leading estate agent, Savills, predict a rise in this figure to 20% within the next ten years. Additionally, a survey by the Chartered Institute of Housing undertaken last year revealed that only 33% of 18 to 24 year olds believe that home ownership is the ‘ideal living situation.’

As Elizabeth Day said in yesterday’s Guardian, “we are faced with a situation where home ownership, the ultimate aspiration of generations of Britons, is becoming increasingly untenable. On the one hand, house prices still remain too high for most of us. On the other, social housing has become a marginalised sector, associated with deprivation and impoverished life chances. Those who earn more than £12,000 a year but less than £25,000 are stuck in between – too rich for social housing; too poor for the mortgage lenders.”

Surely, the time is ripe for the development of a safe and reputable rental sector; certainly, if you can afford to invest in property this is the time to be doing so. Perhaps you should be busily seeking out repossessions…

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Get your hands on the freshest, most comprehensive auction and repossessed properties list in Manchester.

Like all big cities, Manchester is really a collection of small villages, each with its own individual character. Here’s our guide to the ‘villages of Manchester.’

If you hanker after city living then it has to be Central Manchester, where the only way is up – in terms of building that is. The city is now so filled with properties, both commercial and residential, that tower blocks are the order of the day. Don’t equate these tower blocks with those high-rise estates of our post-war years, though; today’s high-flyers have little in common with Del Boy and Nelson Mandela House. Beetham Tower, for instance, the tallest residential building in Europe, is home to not only luxury penthouses and apartments but also to the Manchester Hilton Hotel. The locals actually call this tower the Hilton Tower and the hotel occupies the first 23 floors, of which there are 47 in total.

If you’re not a lover of heights, or if you simply don’t like city life, why not consider South Manchester? Follow the Wilmslow Road out of the city and your first port of call will be the student territory stretching from Rusholme to Withington; travel a bit further on, however, and you’ll come to Didsbury and Chorlton, both very trendy places to live. West Didsbury is home to Thyme Out, which has just been nominated as Deli of the Year; a troupe of travelling players are putting on Shakespeare at Heaton Park; there’s an independent book market in St Anne’s Square at the end of this month (June). You get the picture. Too much culture? Well, just further down the road you have the even more salubrious suburbs of Stretford, Altrincham, and Hale Barns. Yet, over in Wythenshaw, you’ll find Europe’s largest council estate.

In terms of value for money, North Manchester has to be pretty hard to beat. Far more cosmopolitan than south of the city, you’ll find a traditional Jewish community in Prestwich and ethnically diverse populations in Crumpsall and Cheetham Hill. The Moston Lane area is renowned for its strong community values.

The area to the east of the city was one of the most deprived areas in Britain but, with Clayton, Openshaw, and Beswick in East Manchester in receipt of

huge regeneration monies, this is an area ripe for investment. Manchester City FC has set up home in the City of Manchester Stadium, centrepiece of the Commonwealth Games and where the regeneration of the area started. The aims of the New East Manchester

regeneration framework are impressive and bode well for an up and coming future.

If you want to see Coronation-Street-like back-to-backs, Salford and West Manchester should be your destination. This is another area of social deprivation yet travel just a little further out and you’ll find yourself in the WAG territories of Boothstown and Worsley.

For excellent transport links to the city it has to be Eccles, while for sheer loveliness the prize goes to Monton Village, which is a conservation area.

House Price Index
is a government site publishing monthly housing market statistics. For serious research, this site and its associated pages are a mine of information: you will find year-on-year comparisons; statistics relating to new buyers and owner-occupiers; regional variations and all manner of related data

Our Property
provides information from the Land Registry on the actual selling prices of UK wide property; in short, this site helps you see beyond the estate agents’ patter. If you’re looking to buy, you’ll know whether the asking price is realistic or inflated and, if you’re selling, you’ll be more realistic about what your property will achieve.

Property Snake
is the opposite of the property ladder in that it shows you properties where the selling price has been reduced. The site is run by an anonymous owner in his or her spare time; having said that, we tried it out with a couple of post codes and the information was remarkably accurate.

Priced Out
is a campaigning website for first time buyers and provides some very useful links for this particular group.

UK Property Auctions
does exactly what it says on the tin – it is a portal to the UK property auction market.

Bank of England
this is self-explanatory. However this link will take you straight to the Monetary Policy decision page where you will find the latest on interest rates.

Which Way Homes
explains the ups and downs of the property market in a down-to-earth, jargon-free way.

If you find other useful sites or would like to comment on the sites listed above, why not tell us on the forum?

The most recent Allsop auction took place on December 15^th and 17^th 2009 and saw 415 lots offered for sale, a drop of 62% on the same time last year when Allsop were offering 1,100 properties for sale at auction.

This dramatic difference illustrates what is happening in the repossessed property market, which can by summarized as follows:

• Levels of repossession sales at auction peaked in Q4 of 2008 but have fallen sharply since
• Volume of residential auction sales as a proportion of all recorded sales rose from 1.2% to 4.7% in Q4 of 2008 but has since dropped back to 4.1%
• There has been a sharp fall in buy-to-let buyers, with 86% of purchasers at Allsop residential sales buying as private investors

This fall off in sales of repossessed properties can, in part, be explained by the increasing pressure placed on lenders by the government to assist owner-occupier borrowers to avoid the ultimate sanction of repossession.  Increased politicisation of the largest lenders became inevitable as they merged with the Lloyds Banking Group, and ultimately became 43% state owned.  And, of course, Northern Rock had already been nationalised.  As is the way of the world, state owned organisations are politically driven rather than commercially motivated.

2009 Government Measures to Support those at Risk of Repossession

• £200m mortgage rescue scheme targeted at the most vulnerable households on incomes of £60,000 or less a year who are entitled to be re-housed under homelessness legislation. Eligible households apply to their local authority either to sell an equity share or the entire interest in their home to a housing association and remain in occupation at a rent.
• On January 5 2009, changes came into effect on Income Support for Mortgage Interest (ISMI), cutting from 39 to 13 weeks – the time before homeowners who lose their jobs receive financial help with the interest payments on their mortgage. This is only available to homeowners who have an outstanding mortgage of less than £200,000.
• The Homeowner Mortgage Support Scheme (introduced in April ’09) allows households which suffer an income shock to defer part of their payments for up to two years.

You could be forgiven for thinking that the foregoing means that levels of repossession are falling.  You would be wrong.  Although the number of repossessions forecast for 2009 has been reduced from 75,000 to 65,000, the number of repossessions recorded by the Council of Mortgage Lenders continues to rise. What has fallen dramatically is the proportion of these properties offered at auction. Experts predict, however, that 425,000 borrowers are likely to end 2009 more than three months in arrears with their mortgage repayments.

So, could we see a return to the previous trend of auction houses being the place to go looking for investment properties?  It’s a case of watch this space.  The next Allsop residential property auction takes place on 9th and 11th February, 2010.

But where do you find them?

It’s all very well, isn’t it, being told that if you buy a repossessed property you’ll pay around 30% of its market value when what you really need to know is how to find these superb value properties.

The traditional way to find these houses was to visit property auction houses in your preferred area but, as with every other area of life, the internet has changed things a little!  Having said that, by concentrating on only one resource you may miss out on a really good bargain so it pays to spread your net widely.  What follows is our guide to the top repossession property resources.

Pre-Sale Essentials

It’s a large topic that’s best dealt with across two or three posts.  We’ll start with a look at traditional property auction houses.  Before you start your search, however, it pays to have all your ducks in a row!   Some of the major points have already been covered in the article on repossessed house auctions, however, it won’t hurt to reiterate them here:

1. Go to an auction house to get a feel for what happens and how the auction process works.  If you’ve never been to a property auction before your first visit can be a little intimidating – even though there’s nothing to be worried about.  So get this first visit out of the way before you actually go to buy.
2. You need virtually instant finance to buy a property sold at auction.  On the day of the auction itself you will be expected to pay a deposit, which is usually set at 10%, and the balance of the finance is required within 28 days.  Therefore, it is vital that you arrange your mortgage before attending the auction.
3. Have the property surveyed before the date of the sale.  A mortgage lender will insist on this anyway.
4. To find out what properties are listed with the auctioneers in your area of interest you need to order their catalogue.  Some auctioneers are purely local, whilst others deal with house sales nationwide – a quick phone call is all it takes to get the information you need!

Auction Houses

The following auctioneers carry repossessions:

Allsop

MustBeSold

Savills

Barnard Marcus

Our Advice

1. Complete the ‘pre-flight’ checklist detailed above.
2. Search the Allsop site, which lists completed auctions.  This gives you a feel for what properties are going for ‘on the day.’
3. Log into the suggested sites on a regular basis.
4. If you see a property that fits your criteria, attend the auction on the day specified.

Next time: How to Use the Specialist Websites

Although there are some horror stories regarding repossessed properties being inhabitable or having no kitchen and bathroom, the majority of repossessions are in a good state of repair – they are simply homes seized back by the bank after their owners could no longer maintain payments on their mortgage.

If you are interested in buying a repossessed property at auction, look out for the property section of your local paper: estate agents sometimes advertise such properties and invite interested parties to bid. Also, you can subscribe to a property auction mailing list; the company in question will then send you details of forthcoming auctions, either through the post or by e-mail.

Below are some tips on how to successfully buy repossessed property at auction:

• Be prepared by doing your research beforehand: if you are unfamiliar with property auctions, visit a couple to become well acquainted with them. The auction catalogue will feature all properties in the auction, with description and guide price, and conditions of sale: these are legally binding, so make sure you read thoroughly

• Always visit a property you are interested in before the auction takes place – do not reply on the catalogue description. You will need to see the building with your own eyes to ensure it is in satisfactory condition. It is essential that you get a survey done on any property you are interested in, in order to identify structural problems if there are any

Primelocation.com can give you an idea of how much similar properties sell for in a particular area, so you can bid accordingly, and upmystreet.com can give you general information about an area, such as crime levels, socioeconomic background and amenities.

• Be sure of your budget prior to the auction and do not exceed this. It is easy to get carried away with bidding in the auction room, but it is important to stick within your budget for affordability reasons. If you cannot trust yourself to do so, consider taking somebody with you to the auction or get an auctioneer to bid on your behalf.

• Bidding at auction: you will be able to get access to a selling pack regarding any properties you are interested in, and this will hold details of local authority and environmental searches, leases, title deeds, and a fixtures and fittings form (outlining all fixtures included in the sale).

If you are buying a property for letting, it is important to know a little bit about the area you will be buying into. Most importantly, the rental market there should be strong – towns or cities with universities and major hospitals usually yield a steady stream of tenants.

• Arrange finance or a mortgage prior to the auction: If you bid on a property and win the auction, then you are legally required to pay a 10% deposit on the day and complete within 20-28 days. If you cannot complete within this time you will lose your deposit, so make sure you have the required funds in place.

It is important to also take into account the cost of any renovation works needed, as well as any other associated costs, such as solicitor’s fees, insurance, and stamp duty. For properties costing over £175,000, stamp duty is 1%, 3% on properties in the £250,000-£500,000 bracket, and 4% on property worth in excess of £500,000.

Michael O’Flynn, head of content for FindaProperty.com, states:

‘In recent years auctions have become an increasingly popular way to buy and sell property; so much so that the number of flats sold at auction annually has increased by 40% since 2000. Over the same period, the number of houses sold has increased by 30%.

Provided you know what you are doing, auctions can be a great way to make a quick sale and the perfect place to pick up a bargain.

The lack of mortgage finance and a rise in the number of repossessed properties means that this trend will probably continue in the coming year.

However, buyers with little experience should approach the auction room with caution. Seek professional advice, set a limit beyond which you will not bid, and be sure to do the due diligence before you enter the auction room. Once the hammer comes down you have only 28 days to complete – so be sure you have the finance in place and know exactly what you’re bidding on’.

Usually, the estate agent is the first port of call for buyers. However, in January of this year the number of repossessed homes being sent to auction rose dramatically. The beginning of the year is traditionally slow in terms of property sales, yet 465 property lots were on offer in London during January – 364 of these were repossessions.

At the end of 2008, repossessions were 40% up on the year before, and this was reflected in the large number of repossessed properties sold at auction: an incredible 3078 in November and 813 in December. Auction property sales were 40% higher in 2008 than the year before, and repossessed properties made up one third of these.

With repossessions forecast to reach 75,000 this year, up 30,000 on 2008, the chances are that more people than ever before will visit property auctions rather than estate agents to find a home, especially those on a tight budget. These people will have a wide range of properties to choose from: at the beginning of 2009, auction houses were having to include extra slots in their sales to fit in all the lots.

It is no wonder that private buyers are flocking to the property auctions in droves: repossessed homes often represent very good value for money, selling for anything between 20% – 50% below their true market value. This is also a good way for established landlords to pick up cheap property to add to their portfolio; many lots are repossessed buy-to-let properties.

Although buying a property at auction, whether residential or commercial, can represent good value for money (and does so in many cases), it is wise to proceed with caution – especially if you are a novice bidder. Make sure you have seen a property inside to check it is in a habitable state and have a survey done if possible, set a limit and stick to it regarding bidding, and make sure you have finance in place – a 10% deposit will be required on the day and the balance payable within 28 days.

It can be hard to raise the finance needed to buy at auction: many high street lenders have tightened their lending criteria as a result of the credit crunch and require a large deposit of 20% or more: unfortunately, this can pose a huge problem for many first time buyers.

Robert Sinclair, director of the Association of Mortgage Intermediaries (AMI), comments:

“Properties marketed through estate agents sell better when occupied, in good repair, and well-decorated.

Repossessed properties often fail to meet these characteristics, therefore the auction approach provides an effective route to market for those prepared to consider purchasing such properties.

This also speeds completion, thereby reducing maintenance, interest, and marketing costs, so reducing potential residual debt - especially in a declining market.

Whilst the numbers are going to auction are increasing, this is usual at this stage in the cycle and does provide a valuable conduit to keep the number of unoccupied properties at a minimum.

Those looking to offer at auction do have to have a good idea of what loan they may be able to afford and working with a whole of market intermediary can help in developing a robust plan”.

There are both benefits and risks to buying a repossessed property at auction, yet with common sense the risks can be minimised and a bargain can be had. In the last 4 years, repossessed properties going to auction have increased by 400%, and with such properties priced keenly in order to make a sale, it can pay off to buy at auction rather than through an estate agent.

Original article from Property Week 23.01.09 (re-written by HouseRepossession.co.uk)

The market leader in UK auctions is Allsop and they believe that house repossessions could make up to 80% of all lots in 2009, says Nick Duxbury.

While the rest of the property industry sat on it’s hands, in fact one known investment agent in a top 3 property firm didn’t sell one piece of kit in 2008, there were some very busy people in some niche areas of the industry. Allsop residential auctioneer Gary Murphy was a very busy man last year. Murphy and his 24 strong auction team sold 35% more properties last year than they did in 2007, which was the peak of the market.

How did they do this? Well, Allsop are favoured for their auctions and when banks have to sell a repossessed house they turn to the auction industry to get a quick sale. The lenders moved in to repossess the property at an alarming rate in 2008, for the months of July, August and September there was a repossession every 10 minutes in this country. Allsop received an increases of 25% more repossessed houses, over 2007 figures which meant 75% of their auction stock were from the banks.

Allsop actually view and value each and every property, all 3,003 (repossessed properties) that they sold last year and the 530 offered but not sold. Quite the task when there are very few comparable sales around in a stale and somewhat opaque market. The houses needed a guide price for the auction and many lots are turned down as sellers feel these prices are somewhat too low. Murphy states that for every lot they take on, there is one that we didn’t. Respected and known clients understand the transaction process and values a lot better than those new to the market.

Halifax turned out to be one of the most prolific suppliers of repossessed houses, with 100 lots on average per auction. One could wonder if this is a direct reflection of their lending criteria, sub-prime anyone? Or is it aggressive repossession tactics, maybe a mix of both.

It’s interesting to note that Allsop don’t just sit back and wait for the auction to take place they take each and every lot to the market prior to auction through their catalogue and targeting of local buyers who may be past purchasers, local builders, estate agencies and property firms. This marketing increases the ability to achieve the best price for the property at the repossessed house auctions.

The tactics used by Allsop seem to pay off with an 85% success rate and an increase in the market share from 16% to 20%, they are the market leader.

Interestingly, even with a 40% increase in overall lots sold, turnover has fallen by 6%. Still a very good achievement given the market.

Repossessed house auctions are a great way to purchase a house if you have the time and capital and equally if Allsop are trying to market the properties well prior to auction they may also offer the bank and therefore the distressed home owner fair market value given the circumstances.

To find out more about house repossession aucitons, visit our forum.

It would be great to hear about peoples experiences with allsop auctions.

House Prices for Repossessed Houses sold at Auction

The latest Allsop auction offered 1,100 properties for sale with 18 homes selling for less than £100,000. Lets take a look at the investment opportunity that this offers.

Lot 786 - Three bedroom flat in council block in Brixton. Estimated value in Oct 2007 was £180,000. Sold for £79,000 – Council flat, with its proximity to Brixton Station and Victoria Underground makes this a very cheap London purchase. When you take a look at asking rents for 3 bedroom properties in Brixton on the Gumtree.com the price varies but the lowest of the low is still around £220 per week.

Now lets take a look at this as an investment. In simple terms £220 per week = £11,440 per year, less vacancy of say 2 weeks you are at £11,000 per year. You must also take into consideration insurance and repair which might equate to £750 per year on average. Management fees? So you are netting approximately £10,250 per year. Therefore £10,250 / £79,000 = 13% yield. Which is excellent. Compare this to what you get in the bank and at some point this flat will rise in capital value. It looks like a good investment if you can get a mortgage.

Lot 101 – One bedroom flat in part timbered block in East Dulwich. Estimated value in October 2007 was £240,000. Sold for £100,000. Located in Zone 2 with 6 trains an hour to London Bridge. If you search through Gumtree.com for 1 beds in East Dulwich the lowest asking price is approximately £180 per week. This low rent equates to £9,360 per annum less vacancy of two weeks per annum, call it £9,000 per annum. Again, you must also take into consideration insurance and repair which might equate to £500 per year on average for this smaller property. Management fees? So you are netting £8,500 per year. Therefore £8,500 / £100,000 = 9% yield. Which is very good. It looks like a good investment, if you can get a mortgage at a rate of say 6.5% then you would be able to pay your interest off and some of the capital.

Lot 766 - Two bedroom flat in Victorian semi in Forest Gate. Estimated value in October 2007 £235,000. Sold for £95,000. Trains are direct to London Liverpool Station with typical off peak service of 6 per hour. Searching the Gumtree.com finds rental levels for 2 bed properties at an average low of £175 per week but this is a Victorian semi and if you search for that specifically in Forest Gate rental levels seem to be closer to £210. We will assume £195 per week which is £10,140 per annum, less vacancy of £390 (2 weeks rent) and repairs insurance of £750 and we net approximately £9,000 per year. Therefore £9,000 / £95,000 = 9% yield. Again very clean and easy investment not using wild assumptions.

We don’t know the condition of any of the properties. We have assumed reasonable condition but you should probably expect to pay a further £1,000 for the one beds and maybe up to £2,500 for the 3 beds to bring them up to rental standard. Maybe change the kitchen benches over, paint the walls and doors, buy some blinds and if your furnishing it, get some IKEA furniture. Or save money by doing it yourself, but remember every week its not complete you have lost that amount in rent. Time versus money is crucial when looking at investments.

Freehold or leasehold? Freehold is worth more as you do not have to pay any leaseholder a service charge yearly. If these are leaseholds with less than 80 years on the clock then automatic renewal of the lease has expired and you will have to take into consideration marriage value, so you could be up for an additional £3,000 to £8,000. So take a look at the lease expiry date.

Upon writing this, we do not feel that the rental levels could be looked upon as high. In fact we assumed the lowest levels for each product given its suburb when compared to the many entries at the Gumtree.com

So maybe its time to buy as house prices are low? Better than interest in the bank and then wait for the capital value to climb!

When do you think house prices will hit rock bottom?

To find out more about repossessed house prices, visit our forum.

Buying at a repossessed property auction can be a great way to grab yourself a distress sale or repossession bargain. In fact, almost all of the UK’s cheap property is sold via auction.

A legal commitment to buy

When your bid is accepted at a house repossession auction, you’re legally committed to buy. In law, your final bid is viewed as the exchange of contracts… just like that. You can’t pull out of completion without paying damages.

The big advantage to house repossession auctions is, of course, that you can’t be gazumped. And, unlike with a standard sale, the seller can’t withdraw at the last minute. Obviously this is completely different from buying through the normal channels.

Get your finances in place up front

house repossession auctions carry a heavy financial risk. When you’re buying a repossessed house, auction finances must be in place and you must be ready to go to completion within the timescale specified; usually 28 days. No excuses. And you must have your deposit ready on the day of the sale, typically 10% of the purchase price.

Set your top price and stick to it

Because of these obligations, it’s vital you set your top price in stone before you set off to house repossession auctions. Decide what you can afford and base your bid on what you think the property is worth to you. Bidding over your top price can get you into terrible trouble, so take someone with you to help keep your bidding under control if you think you might get carried away!

Repossessed property auctions – always do the legwork first

Never bid blind at house repossession auctions. Before you bid, make sure you’ve researched the property you intend to bid on. Get surveys. Instruct your solicitor to check the property’s title deeds, investigate local searches and dig out any special conditions of sale. And view the property yourself before placing a bid.

The cost of being prepared is much less than it will potentially cost you if you buy a repossessed home at auction and discover later that it’s about to be leveled for a new motorway, or about to fall down because of subsidence.

How do I find out where repossession auctions are held?

Keep an eye on your local papers, contact estate agents, ask lenders, talk to auctioneers and search online to find out when and where local repossessed property auctions are taking place.

Leading Repossessed House Auction Sites:

• government-auction.co.uk,

• repossessedhousesforsale.co.uk

• Reporadar.co.uk

• Allsop.co.uk

To find out more about house repossession aucitons, visit our forum.