UK Property Market

Invest in Property Being Repossessed with a View to Renting to Existing Homeowner

With the uncertainty of mortgage rates and the current downward trend in housing prices, any UK property investor would be wise to keep his money in the bank and watch the statistics over the coming months.  There could be a larger profit gained long-term by waiting for the market to bottom and then pick up property when it’s cheaper.  Homes being sold at the moment are going to be costing a higher than value price and the chances of making any substantial return on these is minimal. 

As the new year starts, many homeowners are going to be faced with repossession orders, or at least the possibility of one hanging over their homes and as bad news as this may be for the home owners themselves, this is where long term property investors will be able to make money.  There’s not a surplus of homes over people requiring them, so once the market stabilizes again the property will sell – it just depends how long you can afford to wait to see a return on the investment in the house. 

If you are looking for a future investment, you could consider looking at homes that are under repossession orders, and approach the home owners with an offer to buy the home with a view to letting them live in it as a rental agreement.  This way, you own the property, and they remain in their home until they choose to move.  You not only have the home as an asset you can use as collateral for other properties or sell to raise finance when you need it, but you will also have the monthly income from the rent you charge the current home owner.  Doing this however puts you in the position of landlord so if you haven’t considered this kind of property investment previously you need to look into the legal implications of what costs you are liable for before approaching the owners of the home.  Having done this, if you decide that this is a good investment option for you, make sure you get a complete survey of the property done before you make your offer, you may not be looking to sell it at the moment but it could affect the price you get at a later date if you do decide to liquidate your property assets.

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