Just had a chat with a friends who’s friend’s father is a developer in Sth East region.
He got a call from his bank the other week- bank manager offers him 4 houses “valued” at 350K each for 1 million, and if he bought them he would throw in another 4 houses for free!
Needless to say he bit his hand off- apparently some other developer had gone whallop.
AFAIK this is normal procedure here for banks to sell repo’d developments to other developers who are “in funds” rather than auction them off to the public. It’s up to the new owner to finish off any work needed to make them saleable and then shift them on with his profit.
It makes sense as banks do not want to get involved in such work and do not want to have to honour any guarantees on the buildings which it would have to provide if it sold them directly to the public.
Hmmm. Haven’t heard a story like that before.
I was told of a developer with 30 houses who told the bank manager I’ve
no money for you and thats that. I’d imagine there’s more than one
developer in this position and the banks will have to eventually call time
and take down this house of cards. As quietly as possible of course.
The real fun will be when the new developer comes to selling them. He has 8 houses supposedly worth 350K, but his cost price is only 125K + any costs in completing them.
Not the kind of competition you’d like if you were trying to sell houses in the area for 350K +