There has been much talk of the recent repossession of a one bedroom flat in One Hyde Park, which is now being sold by the receivers for just over £5m which, at more than £5,000 per square foot, doesn’t exactly look like a bargain.
One common misconception in the property market is that repossession properties are sold cheaply. In parts of the UK where property prices are soft and there’s a lot of stock, a bank may entertain a lower offer in order to get the property sold. However, in central London, genuinely good properties will generally sell for their market value, regardless of whether an owner occupier is selling or a bank.
Buyers also assume that auction rooms are where bargains can be picked up. Again, elsewhere in the UK this can be the case, but looking at recent auction results, properties in London are selling for firm prices through this method too. The other downfall with auctions is that you need to pay for a survey and for your solicitor to read through the paperwork in advance of the auction – if you’re doing this for multiple lots, your upfront costs can eat into any profit.
If you’re looking to buy a property in London, then by all means cast your net as wide as you can, but don’t be disappointed if you end up paying a fair market price, rather than picking up a bargain – the key is not to overpay, and there are plenty of buyers doing that right now.
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