Allsop &Co’s £11.24m residential sale last week saw the sale of two more ground rent investments with nominated purchasers as a result of new provisions outlined in the 1996 Housing Act.
The firm sold the first such property at its May sale (EG May 24). In that instance, the tenants have exercised their rights to take over the auction contract from the successful bidder. The nominated purchaser is due to complete in the next two weeks.
The two investments sold last week with nominated purchasers both exceeded their guide prices. “[The presence of nominated purchasers] is not deterring the market,” said Murphy.
A block of 48 flats in Shirley Road, Southampton, had been guided at £25,000 to £30,000 but fetched £40,000, while 24 flats, eight garages and a lodge in Dartmouth Road, Forest Hill, SE23, sold for £48,000, having been guided at £30,000 to £35,000.
“Talking to investors, they seem to see it as being similar to being outbid in the room,” he explained.
Allsops’ 80% success rate last week was symptomatic of the changing market, said Murphy. “Professional buyers and traders are becoming far more active now and auctions are less dominated by the building societies and banks.”
As a result, success rates have dipped slightly to settle at around 80% to 90% as cost becomes “a critical factor” in setting reserves.
