The auction room remains an efficient and functioning market place, as recent sales have proved. So far this year, Allsop residential auctions have raised over £300 million, with a sales success rate of 78 per cent. More than 1,100 lots have been sold, at six sales.
Our September 19 auction brought welcome relief to the market. Despite choppy political waters, the result calmed concerns by demonstrating a steady demand for realistically priced property. In excess of £40 million was raised overall, with 81 per cent of the catalogue successfully sold. The room was well-attended and bidders, both present and remote, competed enthusiastically.
Highlights of the sale included a vacant building of around 5,450 sq ft in Chelsea’s Redcliffe Gardens. It was knocked down for £3.9 million. The property was arranged partly as a house in multiple occupation (HMO) and was sold with planning permission for 15 self-contained flats. Also, a freehold block of six self-contained flats in Danehill, Reading was knocked down on behalf of receivers for £675,000. This unbroken investment was fully let on assured shorthold tenancies and producing £54,900 per annum (8.1 per cent).
The September auction established that demand is not limited to London and the South East. The Old Brewery in Carlisle, Cumbria for example, comprises six freehold buildings, arranged as 28 self-contained units. The property is part Grade II listed and was offered with planning permission for change of use to provide 36 affordable dwellings. It was sold under the hammer on behalf of a housing association for £400,000.
Despite the continuing instability surrounding Brexit — and the announcement of a general election two days earlier — we delivered a solid result at our latest sale on October 31. The auction raised over £39 million, with 80 per cent of the 190 lots successfully sold. Eight lots were sold for over £1 million. The largest lot of the sale was sold prior — lot 43, a two-bedroom flat in South Street, Mayfair, which sold for substantially more than its guide price of £1.7 million.
The most valuable lot to sell under the hammer was a freehold part reversionary ground rent investment, secured upon 36 flats at Regal Court, Edmonton. It was knocked down on behalf of a charity for £1.5 million. Assured shorthold tenancy investments also fared well. In total 21 were sold showing an average yield across the UK of 9.6 per cent.
Despite headlines in the professional press of weaker results across auction houses generally, the stats paint a more encouraging picture. The number of residential lots sold at auction across the UK in October 2019 (1,890) fell by only 1.9 per cent from October last year (1,927 lots). And the total raised during this period is actually marginally up by 0.9 per cent at £277.5 million.*
Given everything being thrown at us at the moment, we are very pleased with the results so far this year. There is demand across all sectors and all regions but pricing is, as always, critical to success. As has been characteristic of the entire year, buyers are hoping for deals but sellers are holding their ground. This is a good thing. Transactions are happening nevertheless and values are therefore generally holding up.
Many private owners are postponing sale decisions until some semblance of certainty is restored. Those who need not wait, such as mortgagees, local authorities and housing associations, are supporting the stock offered at auction over recent sales. Our next residential sale will held on December 17 at The Intercontinental London Park Lane Hotel, One Hamilton Place, London W1. This will be a serious barometer sale, regardless of the election result.
*Source: Essential Information Group
Gary Murphy is an auctioneer at Allsop
