Ever declining sale volumes and price levels have sent London’s residential auctioneers reeling from their rostrums. But although interest rate rises have proved to be the capital’s residential nemesis, they have yet to prove the downfall of the provincial residential markets.
The first rises last autumn raised fears of a harsh winter ahead for property auctioneers across the country.
As the sale rates began to plummet, disaster seemed inevitable. But by the spring it became clear that sales of residential rather than commercial property were falling, with the London market being the more spectacular victim.
The current fragility of the London market was demonstrated at Willmotts’ May sale when auctioneer Vic Herrington had to endure selling just 25% of the 96 mainly residential properties on offer. In the provinces, the experience of residential property auctioneers has been rather different.
Humberts took to the rostrum in the spring convinced that the West Country’s residential market was at its worst for 20 years. But their faith was rewarded when the 600 people filling the Digby Hall, Sherborne in Dorset, confounded any pessimism by buying 80% of the 31 lots offered — realising a total of almost £2.5m.
At the Cutlers Hall in Sheffield, G A Property Services’ auctioneer, Paul Procter, has been provoking what he describes as “fiercely competitive bidding” for major properties.
Broomcroft, a 36-room property on the city’s Ecclesall Road South entered by the local authority, stands in 3.53 acres of land. Considered suitable for residential conversion, it did not suffer the fate of similar vacant properties in the Greater London area and the 125-year lease sold for £1.4m.
At G A’s most recent sale in Sheffield, Parkhead House, a 10-bedroom property also entered by the local authority and considered suitable for residential conversion, sold for £1.2m.
In Manchester, the residential market is still rising, with residential investments proving to be the more popular type of lot on the rostrum.
“There is no doubt that the market has slowed,” comments Longden & Cook Commercial’s auctioneer, Howard Gooddie. “But we are still in serious business.”
Throughout last year, Leeds was one of the country’s strongest residential markets. Now, despite the growing gloom, Eddisons’ auctioneer, Peter Handley, typifies the provinces’ qualified and cautious optimism. “There are as many properties being put up for auction by vendors as ever,” observes Mr Handley. “Good property inspires good demand.”
Building land for residential development is also still popular — much to Mr Handley’s surprise. “There is more land on the market than last year,” he says.
“Admittedly this could be because vendors just want to off-load their holdings rather than make a profit.” Nevertheless, Mr Handley is under no illusions about the possibility of London’s nemesis descending upon them.
“There is no doubt that interest rate charges are biting,” he comments. “Investors who bought at the top of the market with the intention of selling on at a profit are just out of the game.
“The market is hardening,” Mr Handley concludes, “and in the provinces what can be defined as marginal residential stock is likely to become a broader and broader category.”
