Not looking good for new builds

I was reading over the weekend in the FT an article by the excellent financial commentator Merryn Somerset Webb who has been very accurate in her predictions over the extent of the credit crunch and the impending crash in house prices.

Where do professional landlords go to get their buy-to-let insurance?

Here article on Saturday the City is full of cloth ears points out just how hard it is getting for housebuilders. In April new mortgage approvals were down 40% on last year, no finance means no sales.

The prices of new build flats in centres she says are reported to be down 30% plus. In Plymouth a year ago, new build one bedroom flats went for £135,000. Now a buy-to-let investor can pick it up for £90,000. This is certainly reflected in my home town of Nottingham where two bed 'luxury' apartments which were originally sold for £140,000-£160,000 are now coming back on the market for less than £120,000. Unfortunately many are coming back to the market as repossessions. The FT also reported that more than a fifth of homes being sold at auctions are now repossessions. This number has risen steadily from about 4% in 2003.

Auctions are definitely the place to grab a bargain right now.

Should landlords rush in right now? I suspect that we have some way to go before the bottom is reached - what do you think?