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However, not all repossessed properties are straightforward purchases. There are risks, legal considerations, and financing challenges you need to be aware of before bidding. In this guide, we'll cover:
Once repossessed, the property is no longer owned by an individual but by the lender (e.g., a bank or building society). The lender is legally obligated to sell the property for the best possible price but has no duty to disclose issues with the home.
Below-Market Prices: Repossessed properties are typically sold at a discount to encourage a quick sale.
Fast Purchase Process: Auctions mean quick completions (usually within 28 days).
Great Investment Potential: Many repossessions need light refurbishments, adding value for resale or rental.
Strict Timeframes: Auctions require completion within a fixed period, often 28 days.
Potential Structural Issues: No guarantees on the property’s condition, so a survey is essential.
Unclear Title or Legal Issues: Some repossessed properties come with disputes, covenants, or leasehold problems.
Financing Challenges: Many lenders won’t offer standard mortgages on auction properties.
Fast funding within days to meet auction deadlines. Ideal for properties needing refurbishment before securing a mortgage. Short-term finance to cover the purchase while you refinance later.
Example: An investor wins a repossessed flat at auction for £120,000 but needs to complete in 28 days. A bridging loan allows them to buy the property quickly, refurbish it, and then refinance onto a Buy-to-Let mortgage.
Long-term finance if the property is mortgageable. Lower interest rates compared to bridging loans. Best for landlords planning to let out the property.
Example:
A repossessed 2-bed apartment in good condition is auctioned at £180,000. The buyer secures a 75% Buy-to-Let mortgage, paying a £45,000 deposit and covering the rest with the mortgage.
No Mortgage Delays: The fastest way to buy.
No Lender Restrictions: Purchase any condition property.
More Negotiating Power: Sellers may favour cash buyers.
Example: A derelict house without a kitchen or bathroom (unmortgageable) is auctioned at £85,000. The buyer pays in cash, renovates the property, and then remortgages to pull funds out.Check auction houses and property portals for upcoming repossession sales.
View the property – check for visible damage.
Request the legal pack – ensure no hidden legal issues.
Check planning permissions – confirm there are no restrictions.
Get a bridging loan or cash ready to meet auction deadlines.
Set a maximum bid and stick to it. Factor in stamp duty, auction fees, and renovation costs. If successful, pay the 10% deposit immediately.
Refurbish the property and refinance onto a BTL mortgage or sell for profit.
Outcome:David turned a £40,000+ profit while adding another rental property to his portfolio.
Always view the property before bidding: Repossessions are sold as seen, with no comeback on defects.
Check for unpaid bills or disputes: Utility bills or service charges may be outstanding.
Budget for extra costs: Auctions come with legal fees, survey costs, and stamp duty.
Have an exit strategy: Decide whether you’ll refinance, sell, or rent the property.
your due diligence.
Good for: Investors looking for below-market deals.
Risky for: Buyers without financing in place.
Need help financing a repossession? We can help! Contact us for expert bridging loan and Buy-to-Let mortgage solutions.
Ans: Yes, but only if the property is habitable and mortgageable. Otherwise, a bridging loan or cash purchase is required first.
Ans: Not always! Some attract high competition at auction, driving up prices.
Ans: Lenders need a quick sale to recover their debt, and auctions provide fast completions.
Ans: Yes, unless the property is deemed uninhabitable. Use our Stamp Duty Calculator to check your SDLT liability.
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