PROPERTY: OFFERING CERTAINTY IN UNCERTAIN TIMES
08 September 2016We are living in interesting times; that much is certain. Against a backdrop of political turmoil, a faltering pound and interest rates edge towards zero per cent, the economic outlook is questionable. Property, in common with all other sectors of the economy, once more faces enormous challenges as we move into a new era. However, the Bank of England’s decision, at the time of writing, to cut interest rates to 0.25% and lower potentially, while not exactly amounting to a silver lining and offering little comfort to savers, may boost the property market particularly where cash-rich investors and institutions are concerned. Compared to other investments, property is a safer option offering decent annual returns and capital growth.
Pre-Brexit, there were clear signs that confidence was returning to the property market and we saw evidence of this across the auctions that we held throughout the year. Back in 2011, even though the property market was extremely weak, we decided to re-engage with auctions amid much scepticism from our competitors and clients. Almost five years later, we have 16 auctions under our belt resulting in an overall success rate of 93% and over £44 million worth of sales in the process. Indeed we have been ranked 6th on the list of UK Top Commercial Auctioneers for the second year running according to the Essential Information Group (EIG) making us the only independent Northern Irish property consultancy on a list dominated largely by London-based companies – not a scenario we envisaged five years ago!
When we returned to the auction market almost five years ago, local property auctions were dismissed as fire sales in contrast to across the water where they were a common form of asset disposal. Admittedly, our auctions have included distressed assets, however, in recent years, increasing numbers of willing private sellers now view auctions as an extremely efficient method compared to traditional sales methods.
Take the conventional means of buying and selling property. This normally entails a protracted period of time from marketing to completion, be it residential or commercial property, with no guarantee that the sale will actually go through. Contrast this with the auction process where once the auctioneer’s gavel falls, the buyer pays an upfront deposit and signs an unconditional contract to conclude the deal within four weeks. There is no possibility of price chipping, which is good news for the seller and no prospect of gazumping, equally good from the buyer’s perspective, all of which provides certainty for both parties.
Our auction catalogues feature a wide assortment of commercial and residential properties in addition to land sales: everything from townhouses and shops to hotels, pubs and warehouses. We have even sold a police station! Successful bidders include first-time buyers keen to acquire a competitively-priced home, investors attracted by yields of up to 10% and those wishing to expand or diversify their business interests. One thing they have in common is the knowledge that if their bid is successful, the property will be theirs within a short time-frame and in times like these, such certainty is a rare commodity indeed!
Osborne King’s next auction takes place on the 25th of November 2016. For further information visit www.osborneking.com/auction