The diverse nature of stock sold at auction embraces not only a regional spread of listings and different property types, but also a wide variety of price points, writes Chris Coleman Smith, head of auctions at Savills
In the past year our lowest-value sale was £250 while at the top-end we achieved a £5.25m purchase price. It’s this breadth that has enabled the sector to remain relatively resilient within the wider property landscape, despite the economic and political headwinds it has encountered over the past few years.
A snapshot of recent sales split into four categories: lots prices less than £250,000, those priced between £250,000-£500,000, properties at £500,000 to £1m and listings at £1m and higher. Whether you are an owner occupier, developer or investor, there’s a suitable asset type at each and every level.
Less than £250,000
These lots account for, on average, 55% of our catalogue. Be they flats, houses, land, garages, mixed-use buildings or ground rents, this category can deliver great options for buyers. For example, at our May sale a development opportunity, a five room split level flat in South Norwood, south-east London, sold for £250,000.
At the same sale, a Grade II listed semi-detached house in East Tilbury, Essex, was an ideal buy for an owner-occupier and got snapped up for £186,000. Land always draws interest, particularly if it is conveniently located and well-proportioned; there tends to be several at each sale guided up to £250,000, either in the capital’s outskirts or further afield. And at the sub-£50,000 mark, ground rent investments nationwide provide a low barrier to entry with good potential returns.
£250,000 to £500,000
Just over one-third of lots listed in our recent catalogues have sat within the £250,000 to £500,000 category. Properties at this price point can often be where competition is hottest; houses at this level offer great value for those seeking a home to live in. It’s perhaps no surprise then that around 85% of our instructions in this price region are located in London and within the M25 boundary; commuting locations are what drives investors and owner-occupiers to the auction room.
According to Savills research, in the past year alone Croydon prices have risen nearly by 6%, outperforming those of greater London
Both share a united goal in making a savvy investment and look to areas on the rise such as Croydon to help fulfil this ambition. According to Savills research, in the past year alone Croydon prices have risen nearly by 6%, outperforming those of greater London.
At our May sale, a centrally located end-of-terrace elicited several back and forth bids before the gavel eventually came down at £342,000. Its buyer was far from alone in putting a marker on the map for this south London town as a future hotspot – Croydon’s ongoing regeneration continues to capture buyers’ attention. Over the past year we’ve had more than 50 Croydon properties up for sale and they are always well received.
£500,000 to £1m
Having this sum to play with produces an array of auction property to consider. What makes a quality commercial investment is location; a building in a prime position in a well-regarded town is one piece of the puzzle, but so too is ensuring it’s one with a good lease and strong rental income.
A large retail unit in Wantage, Oxfordshire, certainly ticked the boxes in February. It had a 10-year lease to a large coffee house chain, took in residential upper parts with investment let at £55,300 pa. It sold for £740,000. Meanwhile, developers with this budget could cast their eye towards commercial buildings with potential to convert to residential accommodation, even more so if there is planning permission already in place.
A former bank building in zone 6, in Ewell, Surrey, was just the ticket in November: bought for £625,000, it had been approved for conversion to four flats. The active owner-occupiers at this level tend to be second- or third-steppers seeking more space. Attractive housing stock in sought-after south-west London roads always generate competitive bids.
We had several in March and one that proved highly popular was a Wandsworth mid-terrace. Requiring modernisation, at £824,000 it was the perfect do-er upper for a buyer seeking a long-term home in a family centric neighbourhood. A Battersea mid-terrace arranged as two flats with investment, let at £26,832 pa, sold for £900,000, providing a sound investment opportunity that could be redeveloped.
£1m-plus
Over the past few years, the auctions sector has seen notable shifts in high-value lots and today, lots with seven-figure guide prices account for around 10% of our catalogue. For example, in February, £3.27m bought a Battersea mansion block arranged as seven flats that provided a terrific refurbishment and investment opportunity.
Meanwhile the same sale saw another significant transaction at £1.57m: a Clerkenwell mid-terrace arranged as a retail unit let at £24,500 pa with a vacant three storey residential upper part. In November, a north-west London unmodernised detached house in a well-regarded residential area was ideal for an owner-occupier and duly sold for £1.23m.
Bidders with big budgets will almost always be focused on individual properties and specific locations, motivated to secure a lot with the potential to add value in some way. Above all, sensible pricing is key – where suitability priced, good-quality real estate coming in at £1m to £5m will see demand from buyers in the room.
