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Property Pirates Seek Gold in Below Market Value London Real Estate

March 16, 2009Article by Ray Withers

London 16 March 2009 – Overseas property pirates are looking to for treasure in London as home prices tumble to their lowest for years. Cash rich individuals an overseas consortiums are putting together huge funds to cherry pick the best below market value London homes for their portfolios – thinking that they will make massive profits when the property market eventually changes direction.

Groups have millions to spend on London property – like the Bank of London and Middle East in Dubai, that has a war chest of £275 million cash. Distressed London properties – where builders or homeowners are in financial difficulties meeting their loan repayments and under the threat of repossession or bankruptcy – are only to eager to sell to ease their problems. Many developers are now offering their completed property stock at build cost just to move the debt millstones dragging down their balance sheets.

Even with below market value property, investors need to consider location, property condition and price to make a deal work – and The Shrubberies Mews Townhouses, Streatham, London, are two-bed roomed townhouses offered by Property Frontiers that fit the checklist with:

  • Exclusive off market opportunity
  • 20% below current market valuation
  • Selling price well below estimated cost of construction/land purchase

The developer in financial difficulties due to the current UK economic climate

The properties are 20 minutes from the City and only a short walk from a station and with easy access to all amenities situated on Streatham High Road. Each £300,000 house is open plan downstairs, with double bedrooms and a bathroom upstairs. The cost is a massive £75,000 below-market-value price certified by an independent valuation. For a cash input of £87,000 covering purchase costs, including the 25% deposit investors can buy a property at The Shrubberies Mews Townhouses, with a 75% loan-to-value mortgage Subject to status.

“A huge number of developers and developments are currently either under great strain or are cancelling their future projects, this is simply going to create a critical lack of supply within a relatively short period of time. This is why we believe now is an ideal time to get involved in the London market,” said James Black, sourcing manager at Property Frontiers.

“This opportunity has materialized as a direct result of a London property developer having run into financial difficulties. It is an exclusive off plan opportunity as he attempts to salvage what small amount he can. The primary local agent has valued the properties £75,000 higher than his base price and at that level the rental return is well above the London average.”

For more information contact Property Frontiers on +44 (0) 1865 202700.


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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