The Midlands Engine has yet to gather momentum, but in the auction rooms of the East Midlands we are still seeing strong growth and prices on the up.
In the six years from 2010 to 2015, SDL Graham Penny has seen the number of lots offered annually in the East Midlands almost double, from 454 to 904, with the percentage sold rising from 77% to 80%.
Total sales have risen annually from £39m to £76m.
Nationally, there has been a more modest proportional increase in the volume of lots offered over that period, while the average success rate across the country in 2015 was, at 78%, slightly lower than the figure achieved in the Midlands.
There are several factors that could be behind the regional growth. Geographically, there is strong demand across the region, with the Leicester feel-good factor based on recent football success still a tangible influence on the local and regional economy.
Traditionally renowned as a textiles-dominated area, and of course for the discovery of the remains of Richard III, Leicester is now home to the regional headquarters of such diverse businesses as retailer Next, Barratt Homes and Triumph Motorcycles.
In Derby, work spirals down from Rolls-Royce, and in particular train company Bombardier, with many rail-related businesses located in Pride Park. The city also has many specialist engineering firms.
Nottingham houses the regional head offices of many major companies and now has a diverse offering in retail and leisure.
In the first half of 2016, we have seen strong growth across all sectors.
Our June auctions in Derby and Leicester were the first since the change of name to SDL Graham Penny and saw 107 lots raise £7.5m. Particularly strong sectors included residential renovation projects and small residential plots.
There is strong competition for family homes near good schools and local amenities where the purchaser sees the opportunity to add value on a short timescale.
Our most recent auctions in Derby and Leicester were the first since the acquisition of Graham Penny Auctions by the SDL Group. The deal saw the group’s auction operation, in conjunction with SDL Bigwood in Birmingham, double its total sales to more than £160m pa, taking it into the top four nationwide.
Spread across the Midlands, we now have the UK’s largest auction network outside London, with 26 auctions a year.
The deal struck earlier this year is already proving a success for all concerned. We had known of Rory Daly and CP Bigwood’s interest in our business for some time, but previous talks had come to nothing and neither side went away too disappointed.
In the meantime, we were approached by two other organisations, but we were not interested in either approach, and with SDL’s acquisition of Bigwood and the subsequent access to greater funding, the talks were renewed.
The subsequent deal was struck and the two businesses have already knitted together very well. The sum is now clearly greater than the parts, and our shared cultural values have enabled us to move forward together quickly.
We both share traditional values, but separately we had already begun to grasp technology and its application to the auction process. Graham Penny was the first East Midlands auction house to enable internet bidding in a live auction room.
And both have a similar track record in the East and West Midlands.
In the West Midlands, the number of lots offered has risen from 468 to 629 between 2010 and 2015 – but the percentage sold has risen markedly, from 71% to 88%.
So far this year, the two regions are running neck-and-neck, with SDL Graham Penny raising £31m from 366 lots with a success rate of 81%. In the West Midlands, 262 lots have raised £30m, but with a success rate of 92%, reflecting even greater hunger in the auction room.
Long may it continue, national events notwithstanding.
Andrew Parker is managing director at SDL Graham Penny
