reporadar™

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.

Allsop Residential have announced a special two-day auction of repossessed residential property, to take place place on the 12th and 13th November at the Cafe Royal and the Cumberland Hotel respectively.

The auction will feature 400 lots to be offered on behalf of a variety of mortgagees over the two days.

This auction is in addition to their previously scheduled two-day residential property auctions. The first, on October 30th and November 3rd, has some 500 repossessed properties listed. What is expected to be their final auction of the year, to be held in London on 15th and 17th December, is also expected to include a large number of repossessions.

This auction emphasises the rapid acceleration in the numbers of repossessed properties ending up at auction which has been taking place in recent months. According to Stephen Rose, Debt Advice Bureau director and founder of in:specie™, “Continued tightness in interbank lending and expectations of further sizable falls in property prices in 2009, particularly as the recession bites, mean cash-strapped mortgagees are looking to get what they can as fast as they can”.

Which means as long as the banks need the cash, the flow of repossessed properties to auction should continue. However, should interbank lending free up then, once the balance sheets of the lenders begin to improve, the need to sell fast will disappear. When that happens, it would be reasonable to expect lenders to be more selective about what repossessed properties they sell through auction.