Property: If you buy cheap, expect the bare essentials: Good-value repossessions still exist but true bargains are now rare, says David Lawson

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The Independent Online
FINDING a 'bargain' repossession is getting harder every day. First, the word has been banned after dispossessed families complained they were getting a raw deal. After all, they are still responsible for their mortgage debts, so a low price means they have more to pay off. Second, demand has pushed up values.

Lenders unloaded 70,000 repossessions in 1992, but despite interest-rate cuts and government rescue schemes, almost as many are expected to appear on the market this year - and next year, according to some forecasters.

But the big sell-off has left a bad taste in the market. 'Rings' of agents and speculators have been colluding to buy homes at rock-bottom prices and sell on at a profit, according to Nigel Ewert Evans, chief executive of the Society of Licensed Conveyancers. He says this defrauds those least able to defend themselves.

The society has joined forces with the National Association of Estate Agents to draw up guidelines in an attempt to clean out the crooks and charlatans. Most homes end up at auction, where they at least have the protection of public scrutiny. But by this time they have been sitting unsold for six months or more, and many will have been stripped bare by former owners, angry creditors, vandals or thieves.

There are still opportunities for picking up cheap property that is in good working order. General Accident Property, for instance, will be offering more than 20 seaside flats at an auction in Hollingbourne, near Maidstone, on Monday at guide prices as low as pounds 5,000. Similar ones sold for more than pounds 40,000 in the boom.

But guide prices are not as helpful as they were. Allsop says it is fielding 2,000 inquiries a day for each auction, indicating a rising demand that has boosted prices. GA achieved double the reserve on a Welsh semi recently and Winkworth sold one flat in London's King's Road for 50 per cent more than the guide value. But this was still only pounds 37,500, and average prices at the last Allsop auction were between pounds 30,000 and pounds 40,000 for homes and flats around London.

They were even lower at the firm's Birmingham sale, where a two-bed flat in Dudley went for pounds 9,000 and a Chelmsley Wood one-bedder fetched a mere pounds 7,000. But moving auctions into the provinces has also helped boost returns for dispossessed families. A two-bed Leicester terrace house went for pounds 20,000 - about pounds 7,000 more than if it had been offered in a London sale, according to Gary Murphy.

They might not be bargains, but they certainly seem good value.

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