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Posted on 30th Jan, 2023

Is it a good idea to buy a repossessed house?



As lenders are primarily motivated to regain monies owed to them, repossessed houses can be picked up significantly below market value, making them a good idea for many buyers to pick up a bargain. However, repossessions do come with potential risks, so it is essential to educate yourself on how to overcome these risks and be careful and considered when making an offer.


Are repossessed houses cheaper?

Repossessed properties are an investment which can provide significant ROI. see up to 30% below market value on our listed repossessed properties. However, there are still factors you need to take into account before investing:

    • You may need to invest both time and money into the property in order to bring it up to a standard where tenants can live there. This is why we always recommend viewing the property and conducting a structural survey prior to buying a repossessed property
    • Until contracts are exchanged, you are still at risk of being gazumped by another party. This only applies to repossessed properties in England, Wales and Northern Ireland. Scotland has a different process as offers are binding on both parties.


    Pros of buying a repossessed house in the UK

    • Fast sale. Repossessed properties, by nature, are an inconvenience for lenders. This is due to the fact the they have lost money through the previous owner’s broken contract and the fact that every day that property stands empty means further losses for them. As a result, they’re keen to market and sell the repossessed property as fast as possible so they can recoup their losses.
    • Money saving. As mentioned above, the most obvious benefit of buying a repossessed property in the UK is that they provide an opportunity for investors to achieve significant discounts against the property’s market value, typically up to 30%.
    • No Chain. Another significant advantage of buying repossessed properties is the lack of a chain to hold things up. As you’ll be buying the house from the bank, you won’t have to wait for the sale of properties in the chain, making the transaction a much faster process

    [repo_properties_location location=”london””manchester””birmingham”]

    Cons of buying a repossessed house in the UK

    • Increased competition. Due to the above benefits and the limited number of repossessed properties available on the market in the UK, investors see repossessed houses as a premium commodity. Due to this, we recommend that you view a number of properties prior to purchase as you could still get gazumped during the process. Learn more about how to avoid gazumping.
    • Poor condition. As is with the nature of repossessed properties, the condition of the property might mean that it’s not habitable at time of purchase. As a result, we always recommend viewing the property and conducting a structural survey prior to purchase.

    Repossessed properties can provide you with a strong return on investment but it’s always important to consider the above factors before investing. Always have a budget in mind when buying a repossessed property and be prepared for additional post-completion factors to consider such as setting up new utilities and forwarding unopened post for previous tenants as they could be those from debt collectors.


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