The auctions market is much more stable than it was two years ago, with prices now being set at a realistic level, according to Chris Coleman-Smith, Savills’ head of auctions.
He said prices have “levelled out”, and the effect of the Brexit vote has been to introduce “a lot of realism” into the market.
He said low mortgage interest rates were encouraging buyers and the General Election campaign has had no impact on auctions, after a strong sale result for Savills.
Savills raised £39m from its latest sale on 9 May. A total of 127 lots were sold from 164 offered, a success rate of 78%, with 121 purchased in the room and six prior.
The results were almost the same as the previous auction in March, which raised £38.8m with a success rate of 77%.
“To get nearly 80% and just under £40m is a fantastic result. We had a good cross-section of buyers,” Coleman-Smith said.
Two years ago property was “whooshing” out of the door at auctions, with buyers rushing to snap up every lot, he said. But now “people are squeezing as much as they can out of property to increase its value, or show a return”.
In Savills’ latest sale, at the Marriott Hotel, W1, a mixed-use building in Kentish Town, NW5, sold prior to auction for an undisclosed amount well above the guide of £600,000.
There was strong bidding on a block of part-vacant office suites in Windsor, Berkshire, with an annual rental income of nearly £56,000. The property, with development potential, sold for £920,000 off a guide of £800,000.
Ground rents sold well, including one for a block of 14 flats in Putney, SW15, purchased for £210,000 off a guide of £60,000-plus. A set of six ground rents in Ilford, Essex, all sold well above the guide price.
Tenanted properties were also popular, with one buyer purchasing five flats in the same building in Chippenham, Wiltshire. A terraced house in Launceston, Cornwall, with a sitting tenant, sold for £81,000 off a guide of £65,000, and a partly-tenanted house in Dagenham, Essex, sold for £260,000 from a guide price of £200,000.
Owner-occupiers in the ascendant
There are fewer buy-to-let investors now, said Chris Coleman-Smith of Savills, owing to the introduction of higher stamp duty rates and stricter tax allowances. Owner-occupiers, who do not have to pay higher stamp duty rates, are now more prominent at auctions, he said.
“There are a lot of people out there who can’t sell their property, and consider auction because we can react more quickly to price changes. Their expectations have risen too high, after agents went in strong to get the instructions,” he said.
Several lots in the Savills sale were suitable for owner-occupiers, such as a detached bungalow in Northwood, Middlesex, (pictured) which sold for £1.4m off a guide of £1.3m-plus. “This is a very sought-after area with a golf course nearby,” Coleman-Smith said.
Another lot, in Upper Holloway, N19, is available at £710,000 after going unsold, and Coleman-Smith was confident it would be purchased. “I wish an owner-occupier would buy it and stay there,” he said.
Part of the building is rented out, but new occupants could wait for the lease to expire and then take on the whole of the property, he said.
David Callaghan
