Whilst July is traditionally one of the busiest months in the auction calendar, there were only 132 auctions held across the UK last month – 12 fewer than last year and 36 fewer than in July 2016. It is perhaps no surprise then to see numbers down on last year, with lots offered falling 2.8% to 3,555 lots, lots sold falling 7.1% to 2,578 lots and auction revenues down by over 10%, from £527m to £473m. It should be noted though that these falls are far less than those witnessed in June, when volumes fell by over 20% and revenues by 24%.
Residential lots offered and sold fell by 4.8% and 8.2% respectively, whilst total raised dropped £18m to £309m – down 8.3%. The commercial market saw an increase in lots offered; up 5.7% to 743 lots, but sales dipped by 2.2% and revenues fell 13.5% to £164m.
Savills held a mixed-use auction in London on 24th July and 67 of the 97 lots sold in the room (or beforehand), leading to an overall success rate of 69.1%. This was fractionally better than their June auction which achieved a 67.3% success rate, again reflective of the muted state of the market.
A star lot that attracted some firm bidding was a development site in Colindale, London NW9. This was a former car showroom with planning permission in place for the demolition of the existing space and erection of a new six-storey building comprising 18 flats as well as some B1 space. It sold for £3.21m.
In Muswell Hill, London N10, a rarely available investment opportunity was being sold for the first time in 50 years and attracted significant interest. On the orders of the executor, it comprised a freehold unbroken parade of seven retail units along with seven self-contained mansion flats (four sold on long leases, three let) plus four lock-up garages. Total current rent was £176,465 per annum and it sold for £2.95m reflecting a gross yield of 5.98%.
In Enfield, Middlesex EN3, two three-storey purpose-built buildings totalling 6,398 sq. ft. on a site of 0.14 acre sold for £846,000. The former community hospital had potential change of use to residential, which led to strong interest in the site.
Allsop also had a residential auction on 24th July in London and raised over £38m, achieving a 77% success rate. A full auction room at the InterContinental Hotel saw 180 lots go under the hammer. Despite the strong attendance, the result is down on last year’s figure of £52m.
On-going political uncertainty, and concerns of a forthcoming interest rate hike, saw potential buyers express caution, with a growing number of bidders wishing to negotiate on unsold stock. More than £3m was raised from seven lots in this way, before the sale was over.
However, good quality, high value lots still drew significant interest from bidders. A three-bedroom flat in Hendon, north London, spanning 1,733 sq. ft. and located in a purpose-built block, sold for £1.25m – the highest price achieved on the day and well in excess of its guide.
Despite general concerns about prices of higher value London property, a six-bedroom house in the west London suburb of Ealing sold under the hammer for over £1m.
The largest of the catalogue, a Grade II Listed former mill in Stockport, sold prior to auction following exposure at a guide of £7m. The building has consent for conversion to a mixed use scheme, including 213 apartments and leisure space.
Gary Murphy, Partner and Auctioneer at Allsop said: “At just over 200 lots, this catalogue was a relatively small one for us. The selection of lots featured in July’s catalogue was dictated by the willingness of sellers to accept a more conservative approach to pricing – and not all were prepared to make the adjustment needed to attract interest. Add to this, a growing reluctance to sell in a softer climate – particularly if you don’t have to – and supply is further restricted.
“We are seeing the market correct in front of our eyes. Well located stock at sensible reserves is drawing competition and producing good results. But deepening caution across the market has resulted in many potential bidders sitting on their hands and waiting to negotiate on unsold stock.
“As is usual in times of short-term uncertainty, long term investments fared well. Regulated tenancies sold comfortably and demand for freehold ground rents was sustained.”
