The bargain buildings that they don't want you to know about

Don't waste money on repossession lists, says Felicity Cannell. Use your eyes

Every week, national property pages see a couple of companies advertising lists of repossessed properties to willing subscribers. These lists are simply a description of properties accompanied by the estate agent selling each one. But where does this information come from in the first place?

The London Repossessions List costs pounds 65 for a three-month subscription. The Building Societies Repossession List is pounds 59. The latter's name at least sounds authentic; and in fact the company claims the information comes from the building societies. But which building societies? None of the societies contacted by the Council of Mortgage Lenders said it supplied any company with such information.

The Council of Mortgage Lenders does keep a central register of repossessions, but it is only available to CML members as a means of assessing credit risk.

"Buyers should be circumspect about these lists. They may come from unauthorised providers and may be considerably inaccurate," says Hugh Dunsmore-Hardy, of the National Association of Estate Agents (NAEA). As all the official bodies concerned disclaim any involvement in the lists, one view is that the companies simply go round estate agents' windows and look for cheap properties.

Estate agents are not required by law to reveal if a property is a repossession, but the NAEA considers it good practice to declare it so if asked. If an agent is trying to sell a property on behalf of its sister building society, it must make potential purchasers aware by a declaration of interest in the property.

Woolwich regards advertising a property as a repossession as a breach of confidentiality between themselves and the original owner. Juicy gossip among the locals. Once in motion, the nature of the sale soon becomes clear, but up to that point things are kept quiet. Most Woolwich repossessions are sold through Woolwich Property Services.

The Halifax, whose repossession figures are below the industry average, prefers to sell repossessed houses through a local agent. However, properties which have been left in a very poor condition, or even vandalised, will be sold at auction.

Repossessed properties can often be cheaper than straightforward sales. Often when repossession is imminent, the occupants may take with them everything except the four walls. Carpets, door handles, light fittings; whole kitchens and bathrooms can be sold second hand, even conservatories. Some of us, of course, do have more respect for the house we loved and cared for, but it must be hard to give it up intact. Lenders will then try to hold out for the best price, but the longer a property is empty, the worse state it will get into. Burst pipes during the winter, mould and decay. A listed thatched cottage near Peterborough even had a tree growing inwards through the roof. A property needs constant maintenance, even if unoccupied. The new owner of the house, the mortgage company, hardly has time to visit to check on its welfare.

This is where the bargains are to be had - if you don't mind a bit of DIY. Chris Bucknall and his wife found their house by accident in an Essex village. "We were cruising through the countryside, and as we passed the house I glimpsed an estate agent's board lying in the front garden." Closer examination revealed two more abandoned boards in the wood next door. "The house had quite clearly been empty for some time, and we thought we were on to a winner." They were, but it took some time. The property was for sale at pounds 155,000. The agent freely admitted it was a repossession, but as it transpired, anyone in the street could have provided that information.

The house had been stripped, and with very effective double glazing, it was covered with black mould. An oil-filled bathroom radiator had also burst. Chris offered pounds 130,000 but with a view to dropping the price the longer the bank forestalled. It had been on the market for 18 months. "With the lack of interest the bank seemed to take, I do believe I could have owned it for pounds 100,000." This was a house which had been bought by its previous owners at the height of the property boom for pounds 270,000. Did the bank have any chance of receiving anything like the amount it owed? Unlikely, before the house fell into complete dereliction.

The number of annual repossessions is falling steadily. From the peak in 1991 at around 75,000, last year's figures were 42,500. The new Government will be hoping to reduce the numbers further - Labour has said that more should be done by the lending institutions to prevent repossessions, and suggest some sort of mortgage rescue scheme.

Most of the big building societies regard repossession as the very last resort, if there is no adequate commitment from the borrower. Nationwide's repossession figures were down by 40 per cent in the second half of 1996 compared with the previous six months. This is partly due to the fall in unemployment and low interest rates, but also "due to our increasing initiatives to prevent problems occurring in the first place, thanks to prudent lending and urging borrowers to keep in touch with us concerning their financial situations," says Steve Cowdry, spokesman for the Nationwide.

Looking for a repossessed property to purchase, purely because it is such is no better investment than any other house purchase. It is the same old story. Go for the house you want. If it does turn out to be a repossession there will be no chain to worry about and you may get a good deal, but it could take a long time and a fair amount of bargaining.

Says Sue Anderson of CML: "We want each property to be marketed individually, not as a repossession. There is a public perception that repossessed properties should be cheaper. Lenders do not want to reinforce this image, in fact they want to break it." Estate agent literature is free - pounds 60 for a list of properties is likely to prove an expensive way of buying a lot of waste paper.