Leading auctioneers Allsop concluded their special two day repossessions-only auction, which took place on November 12th and 13th, by achieving an average 94pc sale rate over the event. Selling 95pc of lots at The Cafe Royal on day one and 93pc of lots at The Cumberland on day two, they raised £38.85m.
At a time when estate agents are selling on average less than one property a week and when the property auction has only a 59% sale rate, Allsop have proved yet again that there are still plenty buyers for realistically priced property.
“Each day attracted large crowds and strong bidding”, said auctioneer Gary Murphy, speaking after the second day of the sale. “There was a significantly higher proportion of private buyers this time than at recent sales, particularly in the South East. Owner occupiers including first timers, hopeful second home owners and investors fought against professionals”, added Murphy.
Without the crazy lending practices, which were prevalent pre-Crunch, private and professional buyers are re-entering the market knowing exactly what they have to spend and what they want to spend it on.
However, unlike the early 90s, lenders do not appear to be willing to sell at any price.
“It is usual for repossessions to be offered in the market by private treaty in the first instance. If they fail to attract buyers after a number of months they are entered for auction. In some cases, our auction prices exceeded previous asking prices”, said Murphy.
This is encouraging news for both lenders, trying to recover monies owed, and borrowers, who might face a shortfall debt if the sale price was too low.
With recession in the UK, Europe and the US already well underway, the global deleveraging, growing distrust of all financial institutions and collapsing pound are all acting as additional motivators to put one’s money somewhere tangible.
The recent 1.5pc cut in the Base Rate and decline in 3-month LIBOR, as well as the belief of more rate cuts to come, are proving catalysts for those who still see bricks and mortar as a long-term investment.
Should the pattern set in recent months continue for 2009, it is possible that auctions may provide the basing in prices that the property market has been unable to find from the conventional estate agent approach.
The results can be found at the Allsop site, as can details of the unsold lots.
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