The Council of Mortgage Lenders forecasts 65,000 homes will be repossessed in Britain this year, a two-thirds increase on 2008 when 40,000 were taken over. These repossessions could provide a rich harvest for investors, because they can be bought relatively cheaply, sometimes at 40 per cent below market value.
Nick Hopkinson, director of Property Portfolio Rescue, a company which specialises in buying assets from landlords and developers, said the number of homes being repossessed this year would grow. 'We are likely to see a big rush of repossessions later in the year,' he said, 'People are losing their jobs, insolvencies are peaking and there is no sign that banks are lending more freely.'
A bank or building society will repossess a property if the borrower fails to make mortgage repayments to them. A home can also be repossessed if its owner fails to repay credit card and other non-mortgage loans secured on the property. Once repossessed, the lender sells the home either through an estate agent or at auction to recoup the money they lent.
A number of different properties have been repossessed over the past few months which included listed buildings.
Knight Frank is marketing two repossessed country mansions, including GBP2.75 million (HK$34.69 million) Clifton Hall on the outskirts of Nottingham. This Grade I listed mansion, meaning it is of exceptional interest, boasts 17 bedrooms, eight reception rooms and one hectare of gardens. Just 2.5 per cent of listed buildings in Britain are Grade I.
The bulk are inner city flats or terrace houses offered at low prices. In Bradford, a three-bedroom terrace house, in need of modernisation, is being offered by auctioneer Manning Stainton with a guide price of GBP40,000 to GBP50,000. Landlords are struggling, too. Although they are benefiting from low interest rates, some are struggling to find tenants. According to the Council of Mortgage Lenders, 1,400 buy-to-let homes were repossessed in the second quarter of 2009, about the same as in the previous quarter.