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In the May 2008 Issue of Property Investor News
New Builds at Auction
Much has been publicised regarding the new build market over the last 12 months; corruption and fraud as well as the significant amount of over-supply in some cities, most notably in Leeds and Manchester, have occupied the headlines. These factors have all contributed to substantially higher original sale prices on the retail market while at the same time pulling prices of these properties down on the auction scene.
This month, with help from the EI Group who provided me with all the figures for prices and dates, I took 10 new build properties, compared their original selling price to their re-sale price at auction and spoke to local estate and letting agents to ascertain whether buyers had bought a let-able bargain at auction or not.
Lot 1: 208 Tideslea Path (a three-bed flat), Thamesmead, London, sold as a new build property on 26th September 2005 for £331,699. It resold at an Erinaceous Residential auction on 18th July 2007 for £175,000.
John Smith of Redwood Estates said: "It was a cheap price paid at auction for this property; the investor certainly got a bargain. That flat is worth around £190-200,000 in todays market. In that area, out of 500 flats, around 450 have been repossessed as corruption took place with many people buying flats at overinflated prices. The flat originally would never have been worth £330,000 - the most it could have been worth at that time was £250,000."
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