We get approached from a lot of people looking for a quick sale of flats they purchased for Buy-To-Let from developers 1-2 years ago.  Most buyers have overpaid for these and are now shocked at their flat's real value.
At Fairdeal Homes we believe this problem is bigger than currently reported by people looking for a fast sale. We get approached very regularly by amateur/part-time Buy-To-Let investors looking to sell 1-2 year old buy-to-let flats.  When we value them using our robust valuation process we find that the current value is anywhere between 15-30% below what they may have paid. This is a shock to the people we talk to, especially when considering that last year saw a 8-10% increase in property values nationally.

This problem is starting to get into the press.  Our experience in quick house sales make us believe this problem is bigger than people believe at this time and news of this nature will become more widespread - especially as fixed price mortgage deals run out.

This problem has occurred because when investors have purchased their Buy-To-Let they have trusted that (i) the price the property was being marketed at indicated its value and (ii) when asking a surveyor to value it, that the surveyor is 'determining the value of the property' versus 'confirming that the subject property is selling at the same price as other new builds'.  The margins have been so high with new build flats (20-30% sales margin!) that it has been open to aggressive selling, with everybody pushing prices up, in a self fulfilling approach - hence leading to ever increasing surveyor's valuations, which have little basis on comparable older flats.

If you bought a new purpose built Buy-To-Let flat in the last 2 years then we would recommend using the internet to look around the area and see what the typical price of comparable properties are selling for. This should help you to determine a realistic re-sale price for your flat and then understand of you are suffering from this issue - this re-evaluation should be done on an annual basis anyway as part of good practice.  In the next year or two purpose built flats are not likely to increase much in value, so if your property's mortgage payments are covered and you know you will not need the capital in the next 5 years then maybe you should hold on, otherwise you need to review the market realistically and accept that if you want to sell it may mean a loss - and you should start preparing for this before you approach the market and if there are a number of flats already for sale do not expect a fast house sale.  If you want to sell property quickly then consider property traders like Fairdeal Homes.

If investing now.. invest in resale properties not new purpose built properties, unless you are good at negotiating!  Prices of new builds will drop as sales slow, so maybe there will be some bargains next year.... but make sure you do your own research by comparing the price you are paying with properties in the area that are slightly older as well as relying on the sales agent and the surveyor.