UK Property: REDC Will Increase Buyer Activity - Good for Market

The launch of huge auctions by the Real Estate Disposition Company in the UK, selling repossessed properties by the dozen starting with the first auction this Tuesday, could "bring about a significant increase in First Time Buyer activity in the market, and a slightly less significant increase in buyer activity generally.

It is true that some people will avoid the auctions initially because they offend their British sensibilities. Some first time buyers will stay away because of the 10% buyer's fee, or because REDC's entry put their noses out of joint when the bank withdrew a property because REDC could likely get a better price.

But the press coverage REDC's entry has generated means they will surely have significant attendance at their opening five auctions.

If the first five go well there will be many more; many stories of the bargains that people are getting. The people avoiding the auctions will put their principles to the side rather than miss out on the chance to get a bargain property.

If the auctions have a good run, contrary to popular belief, I don't believe their advertising the repossessed properties to be sold with signs out front will destabilise property markets. Properties aren't selling without significant price reductions, which many vendors still aren't ready to accept, the signs won't change that; no one can force people to drop their prices, and no one will drop to as low as the repossessed homes are sold for. So let's get rid of repossessed properties as quickly as possible, with REDC help, and let their spectacular auctions bring the buyer's out in greater numbers.

That way when the repossession problem starts to die down, buyer activity will be high. By this time a higher percentage of vendors, and accidentally landlords will be getting more anxious to sell. It is likely the increased buyer activity and seller realism will lead to them finding their market's bottom between them.