The auction market remains strong and there is significant and competitive demand in our salerooms. However, buyers are being more selective. Undoubtedly the volume of lots being offered at auction has increased significantly but many auctioneers are withdrawing lots at the last minute and, for the majority that offer online-only sales, the withdrawn lots are mainly those with no registered bidder just before the sale.
Buyers are, however, sifting through and finding lots where the traditional property-buying criteria apply: location, clean title, value and opportunity.
In our saleroom, as we – unusually among national auctioneers – offer bidders the opportunity to attend and bid in person, these lots are achieving highly competitive bidding and invariably achieving sale prices above expectations.
The effect of this is the return of spin-off bidding, where a buyer may attend the auction for one lot, be outbid by a large amount over their intended maximum and then look for and bid on another opportunity that they might otherwise not have considered, or that they did have in their mind as a possible alternative but had not indicated an intention to bid for.
This is more common among in-room bidders and it is achieving sales on a number of secondary or even tertiary-quality lots that might otherwise have not quite hit the seller’s required level and certainly not the final price achieved.
These sale opportunities can happen only in our auction room, where bidders at the venue compete against online and telephone bidders simultaneously.
In other auctioneers’ online-only sales, these are the very lots that would have been withdrawn prior and, despite the auctioneer’s accepting instructions on the day, the seller is denied the opportunity as the auctioneer has unilaterally withdrawn the lot, perhaps to protect their own sales success rate.
In fact, it is for this reason alone that published sales success rates have become meaningless – lots withdrawn prior are not accounted for.
So the question is, what is selling in the auction room today?
Well, our data still shows that anything and everything stands a chance, provided it is well presented, well marketed and priced at a level that fairly reflects the market for that type and location of asset.
Is there too much stock on the market? Certainly there is a lot of choice but, when drilling down into quality and especially location, I would argue the opposite and say that for these lot types offered to the auction market as a whole, there are fewer of them.
But there is still strong demand, which is maintaining and increasing sale prices for this lot type.
The spin-off is that some of the lower-quality lots are still selling and maintaining prices that might otherwise have declined or worsened to a greater level than experienced already.
What is however abundantly clear is what has happened to the buy-to-let market. Successive governments have continued to do all they can to effectively kill off the private rented sector in the mistaken opinion that all private landlords, especially landlords with just one or two properties, are “rogue” landlords.
This is clearly not the case and the lack of new investors in this arena, plus the exit of many, must already be a contributory factor to the housing crisis and rising rents.
It is inconceivable that anyone thought a policy imposing punitive stamp duty on landlords buying and a punitive tax regime on private landlords letting out their properties would do anything but reduce supply, put pressure on demand and result in increasing rents for tenants.
Relax this policy and we will see a flood of people coming back to auction, buying stock to modernise and then not sell for profit but rent out, thus rebalancing some of the huge pressure facing this country for housing. Knowing that the rules for quality and tenant rights are now in place – it is not the Renters’ Rights Act that has caused this issue.
So, what should you buy and where?
Well the answer to that is down to personal circumstances so, bid for what works for you and remember – long term – property always wins. Happy bidding!
Chris Glenn is managing director at Barnard Marcus Auctions