A story reported in the Times Online says that LloydsTSB and Royal Bank of Scotland are selling their repossessed property to subsidiaries rather than on the open market in order to avoid incurring huge losses. The susidiaries pay a ‘fair’ price for them and the hope is that these properties will be sold once the market upturns.
This strategy was apparently used during the last recession, and as such will save UK taxpayers money in the long run as these are two banks almost wholly owned by the UK Taxpayer.
It does however mean that property investors hoping to make from buying some of the potential bargain repossessions will lose out.
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We can report several cases where blocks of repossessed properties are given to favoured high street estate agents, who then push them through their various networks.