Is buying a repossession capitalising on someone else’s misfortune?

As you know, FruGuy and I have recently begun saving for a deposit to buy a home. We aren’t in any rush, but seeing as we’d like to buy somewhere eventually (as in, maybe 3-4 years from now), we decided to start saving now, so we can do it gradually.

But of course, that doesn’t mean I’m not totally obsessed with stopping at every single real estate office I pass to check out what’s available now, and get completely psyched when I see something nice within our (currently non-existent) price-range. You know how it is.

And of course, prices are getting visibly lower in London, thanks to the credit crunch. See? My mum was right: every cloud does have its silver lining.  In our neighbourhood, right now, for a 2 bed flat with private outdoor space, you’d be looking at about £280,000-£320,000.  I’m not sure how much lower they will get in our neighbourhood, but you do get the odd little gem that is going for an absolute song.  And they’ve got repossession written all over them.

I was reading an article in The Times a couple of days ago, about the associated guilt of buying a home at a knock-down price after or just prior to repossession. The author, Tom Ford, was lucky enough to purchase a beautiful home in his and his wife’s dream neighbourhood that was originally on the market for just under £700,000. They ended up buying it for £460,000.  Um, bargain much?

When they went to view the house for the first time, they found the entire thing to have been gutted. Everything of any value had been removed by bailiffs, from the hot tub and fridges, to the wardrobes and even the £15 electrical extractor fans had been pulled from the roof. Of the guilt, he said,

Buying a repossession comes with a bit of irksome moral baggage. There’s a sadness to a house that’s been repossessed, mainly because you can’t help but imagine you’re somehow capitalising on someone else’s misfortune – that you have displaced a family just like your own, turning into a vulture feasting on the carcass of the financially fallen.  We shouldn’t beat ourselves up too much, though. After all, we didn’t cause the situation the unfortunate owners found themselves in. Nor did we buy the house to turn a quick buck – for us, it is somewhere to raise our family. There’s still a lingering worry that the house’s troubled financial history could adversely affect future credit ratings in some way, but any feeling of guilt we might have had has been assuaged by the thought that if we hadn’t done it, someone else certainly would have.

I have to say that I’m totally with him on this. I don’t think I would have any problems buying a home at a rock-bottom price, if it meant that I was buying my dream home. The only thing I would hesitate on would be to buy in an area where a large proportion of houses were being sold after repossession. What do you think? Would you be OK with it?