Property Auction Summary
Wednesday 10th October 2012
Choices Today unearths some of the best property deals available during the last month at auctions in London, Birmingham and Liverpool.
There has been renewed confidence in the property auction market in recent years, with more investors viewing auctions as an effective way of buying and selling properties, particularly in the residential sector.
The latest figures from property auction analysts Essential Information Group shows that there was a significant rise in the volume of property auction lots offered and sold in August compared to the same month last year resulting in a large increase in the amounts raised, according to the latest figures from the Essential Information Group (EIG).
The data reveals that the volume of residential lots offered and sold in August increased by 73% and 52% respectively, while the amounts raised last month reached £44m, up from £32m in August 2011.
Over 1,000 buyers attended Allsop's September residential auction at London's Park Lane Hotel, with a further 250 remote bidders across the course of a bouyant auction also active, helping to establish strong prices for vacant and investment stock.
In total, 257 lots were offered of which, by close of play, 216 had been successfully sold establishing a success rate of 85% and a sales total of £35m. Of those, over 63 (25%) were within the M25 establishing an average lot size in the location of £346,933. The auctioneers expect these figures to rise over the next week as negotiations are concluded on unsold lots.
Speaking after the sale, auctioneer Gary Murphy, commented: “This was an extremely varied catalogue in terms of lot type, size and location. The room was full from the start. It's important for bidders to experience the atmosphere generated by a crowded room. It gives them confidence in the market if they see that others are keen to buy. I'm sure that that's one of the reasons for the strong prices paid on the day.”
His remarks were borne out by the analysis of the results post auction. Over 80% of lots offered sold over reserve prices, 45% of lots sold for at least 20% above reserve with 27 lots more than doubling their reserve prices.
Murphy continued: "Over 40% of the catalogue comprised single vacant houses and flats. These drew strong competition between owner occupiers and investors. Post auction research indicated that, in the main, it was the investors who absorbed the majority."
Of the 58 Assured Shorthold Tenancy investments sold, the average yield was 9.9% across the country. This breaks down to 9.4% in the South East and 10.3% elsewhere. Regulated tenancy investments, of which there were eight offered, established a yield of 4.2%.
Lot 90: A lower-ground floor converted One-bedroom garden flat on Langthorne Road, Leytonstone, E11, offered the highest rental return in London. The property, which is receiving £12,000 per year in rental income, was sold for £75,000 representing an annual gross rental return of 16%.
CPBigwood raised just over £8m at September’s auction, held at Aston Villa football club’s Villa Park, after achieving a 76% success rate after selling 84 of the 107 lots offered for sale.
The auction firm report that 100% of the Local Authority lots sold as did 100% of the Birmingham & Solihull NHS lots, along with 100% of the fixed charge receiver/LPA receivership.
The demand for vacant residential property was strong (78% sold) and residential investment properties also sold well (77% sold), while vacant commercial properties (70% sold) performed better than they had done earlier in the year. Small development sites also sold extremely well (90% sold).
Lot 57: A second floor purpose-built flat on Melville Road, Birmingham, B16, represented one of the most attractive residential property investments at the auction. The property, which is let at an annual rent of £6,420, was sold for £40,500, yielding gross rental return of 15.9%.
“A new record for legal pack downloads was set when 139 different parties downloaded the legal pack for Lot 57,” said CPBigwood auctioneer Rory Daly.
The Assured Shorthold Tenancies sold in the auction room for an aggregate of £1.166m at an aggregate annual rental of £105,768 which equates to an average yield of 9.1%.
The 2 Regulated Tenancy Investments sold at an average yield of 5.5%.
Meanwhile, four of the six commercial investments sold equating to 66.67%, while eight of the 11 vacant commercial lots sold equating to 73%.
Pugh & Co’s auction at Aintree Racecourse in September was standing room only as the wide ranging catalogue attracted a huge crowd with many lots far exceeding expectations.
Baron Hill in Llandudno, offered on behalf of mortgagees, was the first lot to go under the hammer comprising two detached one bedroom cottages and associated land. With a guide price of £60,000 the property went on to sell for £101,000.
The second lot of the day - 53 Princess Drive in Conwy- also offered on behalf of mortgagees, created a huge buzz in the room when it sold for £116,000 above the bottom guide price, following a flurry of competitive bidding.
The success continued throughout the afternoon with a three storey end terrace property comprising ground floor retail unit and eight bedsits to the upper floors on Wavertree Road selling for £136,000 - nearly double its bottom guide.
Paul Thompson, director and auctioneer at Pugh & Co, added: “It was another busy round of auctions which saw a number of interesting commercial lots snapped up and residential properties exceeding expectations. We are looking forward to October’s auctions and have received some interesting instructions.”
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