Filthy house fetches asking price within a month
When a three-bedroom semi-detached house in Erdington, Birmingham, went on the market at the end of February, there was widespread shock over the state of the property. The occupants seemed to have lived in a rising tide of filth, and not done anything about it when the property went on the market.
But that's not the only shock that this property had in store - the real surprise is that within a month of going on the market, it has been snapped up.%VIRTUAL-SkimlinksPromo%
SoldThe property photos did the rounds on social media - until they were taken off the website by the agent. They showed unmade beds piled high with clothes, books and rubbish; debris strewn across the lounge; and a filthy kitchen with every available surface piled high with junk.
At the time the agent said that the mess hadn't put buyers off, and that it was attracting plenty of interest. And it seems he was telling the truth, because in the month since it went on the market it has had 14 viewings, and an offer of the full asking price of £114,950.
The agent told the Daily Mail that it had been bought as an investment, but wouldn't give any more details. The Birmingham Mail speculated that it might have been bought by the investor who looked round at the same time as their reporter and showed an interest in the property.
According to Rightmove.co.uk the buyer has got something of a bargain. The average selling price for a semi-detached home in Erdington is £132,660, and the cosmetic improvements can be done to this one for £5,000.
Bubble?However, for this to be an investment, the buyer must be assuming that property prices are on the increase. Assuming buying and selling costs of £5,000, improvement costs of £5,000 and a selling price of £133,000, it leaves less than £10,000 profit. So there's a good chance they are hoping that rising property prices in the time it takes them to make those improvements will help boost the profit further.
It's the kind of maths that only makes sense in a property market that has gone slightly crazy. This month, the average price of a house in the UK hit a record of £254,000 (according to the Office for National Statistics) - which is a 6.8% rise over the preceding 12 months.
That's the fastest growth we've seen since 2010, and although the figures have been skewed by 13.2% growth in London, prices are on the rise elsewhere. In the West Midlands we have seen prices rise 5.3% in a year.
House prices have now risen for 14 months in a row, and according to Hometrack they show no signs of slowing - because of record-low mortgage rates and demand from first-time buyers and investors.
And talk of the risks of a 'bubble' developing is spreading. Last week, Robert Chote, Head of the Office for Budget Responsibility warned of 'bubbly' activity - such as people buying properties off-plan - or buying properties they never intend to live in.
He may well have added to his list of 'bubbly activity' people buying investment properties, which rely on house prices improving if they are to make a substantial profit.