Landlords are buying properties for an average 11.3% below their original asking price as greater choice strengthens the negotiating position of property investors.
Figures highlighted by Approved Business Finance show the average landlord purchasing in July paid 88.7% of the property’s initial asking price.
The figures come against a more competitive market for sellers, with asking prices recording their largest August fall for eight years.
Rightmove reported a 2% monthly fall in the average price of newly-listed homes in August, while increased property supply has given buyers greater choice.
NEGOTIATING POWER
Approved Business Finance says the conditions could create opportunities for investors able to offer sellers speed and certainty.
However, purchasing below an original asking price does not necessarily mean a property has been bought below its market value, with lenders and valuers making their own assessment of the asset.
Investors using bridging finance to complete purchases quickly also face differing lender criteria over valuations, purchase prices and borrowing limits.
Kelly Moody (main picture, inset), Senior Property Finance Broker at Approved Business Finance, says: “Cash buyers naturally hold an advantage when sellers look for speed and certainty on below-market-value deals.
“However, property investors don’t necessarily need to have the full purchase price available in cash to compete.
“By utilising bridging finance, investors can unlock capital in days rather than months, matching the speed and certainty of a cash buyer to secure discounted properties before the opportunity slips away.”
