The Jewish Chronicle
Auctions resilient in changing market
While the property market has proved it is not immune from the wider political and economic environment, it is still demonstrating its resilience and the auctions sector over the past 12 months has shown there are still opportunities for investors taking a long-term view on their property portfolios.
Hesitancy and nervousness in the market has led to some interesting auctions across the sector, with busy sale rooms and lots of pre-auction interest but declining in-room success rates. There has been an increase in the number of post-event sales, with buyers having the confidence to not bid on a property, instead waiting to see if they can strike a deal once the sale has ended.
I believe this demonstrates there are still plenty of buyers and sellers keen to do business in the UK property market. The interest is there but, as shown in results across the sector, this does not always translate into bidding in the sale room.
Reduction in demand for residential
properties is something we have witnessed over the past 12 months, along with many fellow auction houses, especially those with a strong London focus.
The squeeze on buy-to-let landlords with a series of new legislation, most notably the three per cent stamp duty penalty on second homes, has resulted in investors shifting their focus to mixed residential/commercial investments and commercial investments.
At sales across the country, residential/commercial investments (which are not subject to the three per cent penalty) and commercial investments regularly attract stronger interest than the “typical” residential auction properties. There is evidence to suggest this is more apparent in London and the South East than at regional auctions and it is something we have witnessed at many of our sales.
In addition to the increase in interest for commercial investments, land investments and ground rents have continued to be popular, as buyers look at different types of investments.
As an example, we have sold a series of land investments on behalf of advertising agency JCDecaux at our recent auctions. The sites are former billboard locations across the UK — complete with the billboard. They have performed well, attracting strong interest from local buyers keen to develop the sites or keep them as advertising locations for their own business.
Despite all the market uncertainties, we are very much looking forward to the future with confidence and gusto. While the conditions are far from perfect, the UK property market has demonstrated that, over time, it continues to perform well as an asset class and there will be opportunities for those investors who are prepared to diversify. In less-than-perfect market conditions, it is important to have certainty of sale and the confidence that the best price has been achieved for your property, something auctions will always offer.
Philip Waterfield is a director at Strettons