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Investors Stampede For UK Distressed Property

March 27, 2009Article by Ray Withers

The stampede has started for cash rich investors to chase after distressed UK property. The signal property speculators are giving is they feel the market has dropped about as far as it will – and although there may be further adjustments, they are not going to have a significant impact on UK property prices. Now the money will start pouring in to UK below market value property , – and if you want a share of the pickings you need to act fast.

Finding discounted UK property is not hard – but you need to be very careful with your due diligence.

Distressed property by its nature is property an owner in severe financial difficulties is trying to offload before the creditors catch up. This means there may be an insolvency practitioner hovering around somewhere in the background. An insolvency practitioner is not a property investor’s friend because they cannot sell you a property and then report that they have obtained the best price – the property has to be offered to several buyers, generally at auction to prove this.

One of the best places to find distressed properties for sale is through a property consultant who will have carried out that due diligence for you.

For instance, Property frontiers, a well-established consultancy in Oxford, has two UK distressed property , deals –

Merchants Court, Wavertree, Liverpool

This is an exclusive below-market-value deal with 30 two bedroom apartments at up to 25% discounts. The apartments are new and fitted out ready to rent and prices start at just under £90,000. Last year, identical property was selling for £135,000. Wavertree is a popular Liverpool suburb. Merchants Court is a short stroll from the high street, station and top class sports facilities. The city centre is 10 minutes away by train. Gross yields here are expected to lie between 7% and 10%.

The Shrubberies Mews Townhouses, Streatham, London

This is another exclusive development of a small, gated community of just eight townhouses. The developer is offering a massive £75,000 on the certified valuation – bringing the asking price down to just £300,000. The houses are open plan on the ground floor and have two double bedrooms and a family bathroom upstairs. Again, they are a short walk from local shops and stations. The City and West End is within easy reach by train Gross yields of 6% at £18,000 per year are expected from the development.

Both these developers are selling at more or less the price of the land plus build costs to clear the properties from their books. Independent valuers have certified the property prices.


Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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