AUCTIONS CONTINUE TO LEAD THE WAY TO RECOVERY
09 September 2014The saying goes that “imitation is the sincerest form of flattery”, so it is somewhat gratifying to see that property auctions have become an integral part of the local property landscape with an estimated £32 million worth of property sales achieved at auction to date this year (Source: EI Group). This was certainly not the case when we held our first auction back in 2011.
Initially, it was an uphill struggle trying to organise an auction especially in terms of getting buy-in from vendors - hardly surprising given the economic conditions at the time. From our perspective, the auction was a key towards unlocking activity and a means of getting purchasers to complete deals; it was another matter persuading private clients, financial institutions and other parties in control of property assets that this was an effective, efficient way of disposing of property that was difficult to sell on the open market.
Consequently, our first auction in September 2011 was a fairly modest event with 27 lots up for sale, 90% of which were sold on the day. The success of this auction made it marginally easier to convince vendors of the merits of putting their properties up for auction, and so we continued building up our catalogues, increasing our lots in terms of size and value with the result that our ten auctions to date have raised c. £25 million. Indeed, our most recent auction in June 2014 featured 70 properties and realised over £6 million in sales.
The most positive signs of recovery are within the domestic housing and development land markets which is attracting investors, first-time buyers and house builders. In addition, the commercial sectors are also seeing increased buyer demand with competitive bidding in most cases.
The vast majority of buyers at our auctions are cash-buyers, many of whom sold property at the height of the market and who are now happy to re-invest demonstrating their confidence in property as a medium to long-term investment, or how it should be viewed it in pure investment terms.
As the property market continues to stabilise and improve, selling property at auction has come to be recognised as an efficient and popular sales method. The ratio of private sellers is increasing and we are also seeing the quality, volume and value of lots improving. In our June 2014 auction our largest sale was an industrial investment selling for £850,000, which probably has not been achieved since 2007. We expect this trend to continue as market conditions improve for vendors.
For details of Osborne King’s next auction on Friday, 28 November 2014, visit www.osborneking.com/auction or email Mark Carron on firstname.lastname@example.org