The firm reveals that lenders have moved away from the old model of assuming that all property taken into possession is automatically put up for sale as this could result in lowering overall property prices and lenders suffering greater deficits. Furthermore, sales through auctions are reported to be slow which has been seen historically as the best bet for a quick, but albeit reduced sale.
Paul Duckworth, director at The Charlbury Group said: “An increase in distressed sales looks likely to drive prices down, which will act against lenders who risk suffering a shortfall from the house sale. This does not mean that all properties are unsuitable for sale so lenders are tapping into local expertise to get guidance on the saleability of the property.
“There is a growing belief that there is simply no substitute for a physical property assessment to identify the possible strategies and quick wins to ensure that lenders have an accurate appreciation of the asset that they’re looking to sell. It also enables them to flag any items that might adversely affect the sale of the house. This especially applies for any properties that have been on the market for over 90 days without an offer.”
Recent months have seen both a reduction in house prices combined with an increase in time that properties spend on the market. Certain sectors are also feeling the pinch more than others and in addition to the fact that the number of all repossessed properties still owned by lenders has almost doubled in the past year; the number of those which are former buy-to-lets has more than tripled. This has led to lenders adapting their strategies which no longer assume that selling is necessarily the best option. This evolving attitude has similarities to the early nineties and the emergence of expansion schemes to enable defaulting borrowers to remain in their homes.
