Risks after repossession: Nasty surprises may confront buyers of houses that have been reclaimed

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AROUND 80,000 repossessed homes have been on the market during the last year. They seem attractive because of their low prices, but anybody considering buying one should check it out very carefully.

Les Davidson, a top session guitarist, thought he was on to a good thing when he and his girl- friend, Bobby, bought a one- bedroom town house in Hackney, London for pounds 48,000.

He was desperate to move, as they had to get out of the property they were renting.

It was a repossessed property, which he subsequently discovered had never been lived in. No one therefore knew anything about it. He knew there had been water damage, and because of this it was reduced from pounds 56,000 to pounds 48,000.

What he did not know was that the electricity had never been connected to the mains, and the central heating and some of the plumbing had not been fitted properly.

'We moved in after a quick exchange and completion,' Mr Davidson said. 'The next day, the man from London Electricity arrived to put in a meter and reconnect us. He told me 'I can put a meter in for you, mate, but there's no power. It's still 20 foot under the pavement outside.'

'Some structural work had been done to the property, so we presumed - wrongly - that the previous owner had had a survey done and that everything was in working order. I knew that if you bought from auction, you buy as found, but nobody led us to believe that buying a repossessed property was the same. Since it had recently been converted, I thought the valuation for the mortgage was enough.'

Mr Davidson was told it would cost him around pounds 400 to put right, and the freeholder, Pearl Properties, insisted on a letter first from London Electricity guaranteeing to make good the pavement.

London Electricity came within three weeks of Mr Davidson moving in and in fact the bill came to pounds 211.20. But the 'jointer' (the person who connects the power) told him it could sometimes cost far more if, for example, they had to take up a cobbled street. It cost a further pounds 130 to correct the other faults.

Brenda Hobworth, the manager for Winkworth in Hackney, who sold the flat to Mr Davidson, said: 'It was in poor condition and quite a hotchpotch. Because no one had lived in the property, we had no history of it.

'We did know that Pearl Properties, who converted the warehouse, ran out of money and managed, somehow, to sell the units to people who agreed to pay for the services to be put in. It was very popular at the time. I have never come across a property that has not been connected to the mains.

'We knew there was no electricity but assumed it had just been cut off. Apparently the previous owner had never lived there and defaulted on his mortgage from the start. With repossessions you do get problems. They are usually properties for experienced buyers or builders, not first-times. But Mr Davidson just fell in love with it.

'If he had had a home-buyer's report beforehand, he would have found out about the problems. Any purchaser buying a repossession should satisfy themselves fully that all parts of the building are in working order. It is up to them. I would suggest a full survey is worth the money because you are buying an unknown quantity.'

Mr Davidson could not afford a full structural survey, however, and no one had told him about a home-buyer's report. His valuation cost him pounds 125. A home-buyer's report would have cost no more than pounds 235 and for just over pounds 100 more would have saved him much heartache and money.

'When I rang Abbey National,' said Mr Davidson, 'they were extremely rude to me. Their attitude was they had sold me a cheap property and it was of no interest to them any more.'

The Abbey had 4,139 repossessions to dispose of in the six months to June. The society is just dealing with addresses. Paul Rossiter, properties manager, said: 'We get two very simple reports from two agents to ascertain the value of the property. But we do instruct our solicitors to respond to pre-contract enquiries saying we have no knowledge of services and that the purchaser must rely on his or her own inspection and professional advice.

'If a purchaser is diligent in his purchase and there is a major problem, we are happy to negotiate to achieve a mutually acceptable solution.'

With repossessions buyers may face other problems, such as structural damage from a resentful previous owner, but complications can occur which a buyer might not foresee.

Julia Cook, manager of Cluttons in Kensington, said: 'You often have people hounding you if the person who owned the property before was in debt, both by post and in person. And if you apply for a credit card, then because of the address you are likely to be turned down initially.'

(Photograph omitted)

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